Other things equal, by decreasing the interest rate paid on ...

[cnetterville]

Other things equal, by decreasing the interest rate paid on banks' required reserve deposits, the Fed can ________ the level of reserves banks are willing to hold, which would result in a(n) ________ in the money supply
 
  A) increase; increase
  B) increase; decrease
  C) decrease; increase
  D) decrease; decrease

Question 2

In the coordination failure model, the most likely explanation of business cycles are
 
  A) money supply shocks.
  B) government spending shocks.
  C) total factor productivity shocks.
  D) fluctuations between good and bad equilibria.

[huda]

Answer to Question 1

C

Answer to Question 2

D

[cnetterville]

Gracias!

[kswal303]

Excellent