Although open market operations and discount loans both change the monetary base, the Fed has
A) greater control over open market operations than over discount loans.
B) greater control over discount loans than over open market operations.
C) very little control over either discount loans or open market operations.
D) complete control over both discount loans and open market operations.
Question 2
All of the following are reasons for the downward-sloping aggregate demand curve except
A) as the price level decreases, the quantity demanded of real GDP decreases because goods and services are more expensive.
B) as the price level increases, the real value of household wealth declines, reducing consumption.
C) a higher price level increases the demand for money, causing an increase in the interest rate which reduces spending on investment goods and consumer durables.
D) if the price level rises in a country relative to price levels in other countries, net exports will decrease in the original country.
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