The Fed is concerned that inflation might occur. To help eliminate this possibility, the Fed could ________ government securities to ________ the federal funds rate in the short run.
A) buy; raise
B) sell; not change
C) sell; lower
D) buy; lower
E) sell; raise
Question 2
If the Fed tries to lower the unemployment rate so it is lower than the natural unemployment rate, in the long run the SRPC ________ and the LRPC ________.
A) shifts downward; shifts leftward
B) does not change; shifts rightward
C) shifts upward; does not change
D) shifts downward; does not change
E) does not change; does not change
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