Increased demand for U.S. products by foreign residents will lead to a depreciation of the U.S. dollar relative to foreign currencies

In Figure 15.3, the Fed can change the equilibrium interest rate from 2 percent to 6 percent by

A. Reducing the discount rate. B. Selling bonds in the open market. C. Decreasing the reserve requirement. D. Buying bonds in the open market.

As the real interest rate increases, the quantity of saving supplied ________ and the quantity of saving demanded ________.

A. increases; decreases B. does not change; does not change C. increases; increases D. decreases; increases