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Author Question: If the Fed buys U.S. Treasury securities, then this A) increases reserves, causes banks to reduce ... (Read 154 times)

@Brianna17

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on: Jun 29, 2018
If the Fed buys U.S. Treasury securities, then this
 
  A) increases reserves, causes banks to reduce their loans, and increases the money supply.
  B) decreases reserves, causes banks to reduce their loans, and decreases the money supply.
  C) increases reserves, encourages banks to make more loans, and increases the money supply.
  D) decreases reserves, causes banks to reduce their loans, and increases the money supply.

Question 2

In the dynamic aggregate demand and aggregate supply model, what is the result of aggregate demand increasing slower than potential real GDP?
 
  What will be an ideal response?


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nhea

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Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

Aggregate demand increasing slower than potential real GDP results in recession.


@Brianna17

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Reply #2 on: Jun 29, 2018
Thank you


nhea

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Reply #3 on: Jun 29, 2018
No problemo


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