If the Fed acts to increase the money supply,
A) it will sell bonds, drive bond prices up, and drive interest rates down.
B) it will buy bonds, drive bond prices down, and drive interest rates down.
C) it will sell bonds, drive bond prices up, and drive interest rates up.
D) it will buy bonds, drive bond prices up, and drive interest rates down.
Ans: D) it will buy bonds, drive bond prices up, and drive interest rates down.
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Which of the following conditions must hold in the equilibrium of a competitive market where the government puts a specific tax on consumers?
A) The quantity sold and the price paid by the buyer must lie on the demand curve. B) The quantity sold and the seller's price must lie on the supply curve. C) The quantity demanded must equal the quantity supplied. D) the difference between the price the buyer pays and the price the seller receives must equal the specific tax. E) all of the above