Equilibrium in the market for bank reserves determines the
A) price level.
B) exchange rate.
C) federal funds rate.
D) 30-year Treasury bond rate.
E) inflation rate.
Question 2
In the figure above, if there is no Ricardo-Barro effect, the government has a ________ because ________.
A) budget deficit; there is no Ricardo-Barro effect.
B) balanced budget; there is no Ricardo-Barro effect.
C) budget surplus; the SLF curve lies to the right of the PSLF curve.
D) budget surplus; there is no Ricardo-Barro effect.
E) budget deficit; the SLF curve lies to the right of the PSLF curve.
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