The Fed's purchase of government securities could A) increase ...

[jlmhmf]

The Fed's purchase of government securities could
 
  A) increase loans made by banks.
  B) be an effective anti-inflationary policy.
  C) decrease the price level and have no effect on real GDP.
  D) decrease bank reserves.

Question 2

One policy that would increase the saving rate would be
 
  A) raising taxes on the returns to saving.
  B) raising taxes on the returns to investment.
  C) taxing consumption.
  D) raising taxes on saving.

[jasonq]

Answer to Question 1

A

Answer to Question 2

C