Author Question: According to this Application, the Fed injected large amounts of reserves into banks during the 2008 ... (Read 36 times)

lindiwe · **on:** Jun 30, 2018

According to this Application, the Fed injected large amounts of reserves into banks during the 2008 financial crisis. The Fed needs to make sure that, in the long run, banks do not loan out too many of these reserves or the result will be

A) additional unemployment. B) higher inflation.
C) higher interest rates. D) a smaller money multiplier.

Question 2

Suppose that aggregate demand increases along the upward sloping portion of the aggregate supply curve. What is the result?

A) Real GDP increases more than nominal GDP increases.
B) Nominal GDP and real GDP increase by the same amount.
C) Nominal GDP increases more than real GDP increases.
D) Nominal GDP and real GDP decrease by the same amount.