Which of the following models results in the greatest deadweight loss, assuming a fixed number of firms with identical costs and a given demand curve?

A open market purchase of government securities by the Fed will cause which of the following?

A) an increase in the equilibrium quantity of reserves B) a reduction in the federal funds rate C) an increase in the amount of excess reserves that banks will wish to hold D) all of the above

Suppose that income taxes are increased by $600 billion. If the marginal propensity to consume is 0.75 and the spending multiplier is 4, by how much will the aggregate demand curve shift at a given price level?

A) $2,400 billion B) $1,800 billion C) $600 billion D) $450 billion