Quantitative easing refers to a policy action in which a central bank
A) sells government securities to directly decrease bank reserves.
B) decreases interest rates directly without altering bank reserves.
C) increases interest rates directly without altering bank reserves.
D) buys government securities to directly increase bank reserves.
D
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A decrease in United States net foreign direct investment would occur if
A) net capital flows increase. B) net foreign investment decreases. C) U.S. citizens have decreased the value of foreign stocks and bonds they own. D) U.S. citizens have decreased their building or purchasing of facilities in foreign countries.
According to the hypothesis of New Keynesian inflation dynamics, an increase in aggregate demand brings about
A) initial sluggish adjustment of the price level followed by higher inflation later on. B) initial rapid adjustment of the price level followed by lower inflation later on. C) initial sluggish adjustment of real GDP followed by more rapid real GDP growth later on. D) sluggish growth in real GDP both initially and later on.