Which of the following increases when the Fed makes open-market sales?
a. currency and reserves
b. currency but not reserves
c. reserves but not currency
d. neither currency nor reserves
d
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Refer to Figure 16-10. In the graph above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could Congress and the president use to move the economy to point C?
A) buy Treasury bills B) increase government spending C) increase income taxes D) decrease the discount rate
The bond supply curve
A) shows the quantity of bonds lenders are willing to supply as bond prices change. B) shows the quantity of bonds lenders are willing to supply as interest rates change. C) shows the quantity of bonds borrowers are willing to supply as bond prices change. D) is represented by a downward-sloping line when the price of bonds is on the vertical axis and the quantity of bonds supplied is on the vertical axis.