Since the mid-1980s, if the Fed wanted to shift to a more expansionary monetary policy, it would
a. expand the reserves available to the banking system, which would drive down short-term interest rates.
b. reduce the reserves available to the banking system, which would drive down short-term interest rates.
c. expand the reserves available to the banking system, which would drive up short-term interest rates.
d. reduce the reserves available to the banking system, which would drive up short-term interest rates.
A
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An __________ is one in which is it not possible, through any change in the distribution of Good X or Good Y, to benefit one person without making some other person worse off.
Fill in the blank(s) with the appropriate word(s).
Which of the following is a TRUE statement about the relationship between the price of bonds and the interest rate?
A) The prices of bonds are directly related to the interest rate. B) The prices of bonds increase when the interest rates rise. C) The prices of bonds are unrelated to the interest rate. D) The prices of bonds are inversely related to the interest rate.