Author Question: If the Fed sells U.S. government securities, A) the U.S. Treasury loses some revenue. B) the ... (Read 90 times)

nramada · **on:** Jun 29, 2018

If the Fed sells U.S. government securities,

A) the U.S. Treasury loses some revenue.
B) the U.S. Treasury gains some revenue.
C) banks' reserves increase.
D) the federal funds rate rises.
E) None of the above answers is correct.

Question 2

If there is no Ricardo-Barro effect, an increase in the budget deficit

A) decreases the amount of investment.
B) increases the supply of loanable funds.
C) lowers the equilibrium real interest rate.
D) increases the amount of investment.
E) decreases the demand for loanable funds.