The aggregate demand curve will shift to the right ________ the initial decrease in taxes.
A) by less than
B) by more than
C) by the same amount as
D) sometimes by more than and other times by less than
Question 2
The Federal Reserve responded to the 2008 financial crisis in several ways. Which of the following is not one of the ways the Fed responded?
A) The Fed made investment banks eligible for discount loans.
B) The Fed lowered the required reserve ratio on demand deposit accounts in order to increase the amount of bank reserves.
C) The Fed helped JP Morgan to acquire Bear Stearns, a nearly bankrupt investment bank.
D) The Fed lent investment banks Treasury securities in exchange for mortgage-backed securities.
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