Suppose the central bank reduces the money supply. This monetary ...

[savannahhooper]

Suppose the central bank reduces the money supply. This monetary contraction will always cause a greater reduction in output when it is accompanied by
 
  A) an increase in expected future taxes.
  B) an increase in expected future interest rates.
  C) a reduction in expected future output.
  D) all of the above
  E) none of the above

Question 2

Although the FDIC was created to prevent bank failures, its existence encourages banks to
 
  A) take too much risk.
  B) hold too much capital.
  C) open too many branches.
  D) buy too much stock.

[Awesome]

Answer to Question 1

D

Answer to Question 2

A