Market-day supply elasticities can vary between 0 and 1

Refer to Figure 26-6. In the figure above, if the economy is at point A, the appropriate monetary policy by the Federal Reserve would be to

A) raise interest rates. B) raise income taxes. C) lower income taxes. D) lower interest rates.

The equivalent to the Federal Reserve's discount rate in the European System of Central Banks is the

A) federal funds rate. B) marginal lending rate. C) deposit facility rate. D) lombard rate.