Discouraged workers are included in labor force figures, but not in unemployment figures

When the Fed fears inflation, the Fed ________ government securities, so that the federal funds rate ________ and the quantity of money ________

A) buys; rises; decreases B) sells; falls; increases C) buys; falls; increases D) sells; falls; decreases E) sells; rises; decreases

An export subsidy has the opposite effect on terms of trade to the effect of an import tariff. Domestically a tariff will raise the price of the import good, deteriorating the domestic terms of trade

A production subsidy for the export product will lower the local price of the export good, lowering the domestic terms of trade for the country. Hence the export subsidy and the import tariff have the same effect. This analysis seems to contradict the first sentence in this paragraph. Discuss this paradox.