Which of the following would cause an increase in M1? A) a ...

[azncindy619]

Which of the following would cause an increase in M1?
 
  A) a reduction in the required ratio of reserves to deposits
  B) an increase in the discount rate
  C) an open market operation where the Fed buys bonds
  D) all of the above
  E) none of the above

Question 2

For this question, assume that the Fed sets monetary policy according to the Taylor rule. Suppose current U.S. macroeconomic conditions are represented by the following:  < ? and u > un. Given this information, we would expect that the Fed will
 
  A) implement a monetary contraction.
  B) implement a monetary expansion.
  C) maintain its current stance of monetary policy.
  D) more information is need to answer this question.

[ktidd]

Answer to Question 1

C

Answer to Question 2

B