Which of the following is a tool the Fed uses to adjust the quantity of money?
i. The Fed can change the interest rate banks charge for loans to their prime customers.
ii. The Fed can change the discount rate on loans to banks.
iii. The Fed can buy or sell government securities.
A) i only B) ii only C) iii only D) i and iii E) ii and iii
Question 2
The figure above shows the U.S. demand for labor curve. If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be a
A) movement upward along the demand for labor curve from a point such as C to a point such as B.
B) leftward shift of the demand for labor curve.
C) movement downward along the demand for labor curve from a point such as A to a point such as B.
D) rightward shift of the demand for labor curve.
E) None of the above answers is correct because there is no change in the demand for labor curve.
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