Suppose the central bank of a country increases the discount rate from 5 percent to 7 percent. The demand for money remaining unchanged, this is likely to _____ in the country

A lower discount rate discourages banks from borrowing reserves and making loans. Therefore, if the Fed wants to expand the money supply, it raises the discount rate

a. True b. False Indicate whether the statement is true or false

In the AD/AS diagram, what type of unemployment is shown by how close the economy is to the potential or full-employment level of GDP?

a. Natural b. Structural c. Cyclical d. Full