In general, if the Fed increases its target for the federal funds ...

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In general, if the Fed increases its target for the federal funds rate,
 
  A) short-term nominal interest rates will increase and long-term nominal interest rates will not change.
  B) short-term nominal interest rates will not change and long-term nominal interest rates increase.
  C) short-term nominal interest rates will increase and long-term nominal interest rates will also increase.
  D) short-term nominal interest rates will not change and long-term nominal interest rates will also not change.

Question 2

If the government cuts taxes ________.
 
  A) disposable income falls
  B) planned expenditures rise
  C) the IS curve shifts to the left
  D) all of the above
  E) none of the above

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Answer to Question 1

C

Answer to Question 2

B