In the above figure, suppose the economy is at a short-run equilibrium at point B and the interest rate is r2. Which of the following policy options for the Fed will help solve the short-run situation?
A) open market sale of government securities
B) lowering the required reserve ratio
C) lowering the differential between the discount rate and the federal funds rate
D) open market purchase of government securities
A
Economics
You might also like to view...
A relationship between two variables in which one variable increases at the same time as the other decreases is called
A) nonlinear. B) constant. C) inverse. D) direct.
Economics
Tradable allowances are like taxes in that they both:
A. maximize surplus. B. are not efficient. C. impose a quota on output. D. None of these statements is true.
Economics