The figure above shows the market for bank reserves in Futureland

If the Bank of Futureland lowers the target federal funds rate by 1 percentage point, the central bank will conduct an open market ________ of government securities of ________ to ________ the supply of reserves.
A) purchase; $25 billion; decrease
B) sale; $25 billion; increase
C) sale; $75 billion; decrease
D) purchase; $75 billion; increase
E) purchase; $25 billion; increase

E

Economics

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Suppose you observe that minor changes in supply seem to cause dramatic changes in price. You would conclude that

a. demand is unit elastic b. demand is elastic c. demand is inelastic d. demand is perfectly inelastic

Economics

Market

What will be an ideal response?

Economics