When actual output increases the potential output, _____. a. ...

[karen]

When actual output increases the potential output, _____.
 a. more resources become unemployed.
  b. prices remain constant.
 c. prices tend to increase.
 d. nominal GDP decreases.
 e. resource prices decrease.

Question 2

When the Fed purchases U.S. government securities through the open market, the money supply:
 a. increases, the interest rate falls, and the quantity of money demanded increases.
  b. falls, the interest rate falls, and the quantity of money demanded increases.
 c. increases, the interest rate increases, and the quantity of money demanded increases.
  d. falls, the interest rate increases, and the quantity of money demanded falls.
 e. falls, the interest rate falls, and the quantity of money demanded falls.

[Mollythedog]

Answer to Question 1

c

Answer to Question 2

a

[karen]

YES! Correct, THANKS for helping me on my review

[ghepp]

Gracias!