By changing the reserve requirement the Fed can change the level of bank reserves and the lending capacity of the banking system.

The Fed sells $300 million U.S. government securities to commercial banks. This action leads to ________ in Fed assets and ________ in Fed liabilities

A) a $300 million increase; a $300 million increase B) a $300 million increase; a $300 million decrease C) no change; no change D) a $300 million decrease; a $300 million decrease in E) a $300 million decrease; a $300 million increase

Which of the following is included in the consumption component of U.S. GDP?

a. purchases of staplers, paper clips, and pens by U.S. business firms b. purchases of natural gas by U.S. households c. purchases of newly constructed homes by U.S. households d. All of the above are correct.