The Fed can directly control the federal funds rate

When two people are on the contract curve, the allocation of goods

A) cannot be improved. B) is pareto efficient. C) is such that neither individual can be made better off without making the other worse off. D) All of the above.

If a $1 million open market purchase by the Fed generates a new deposit at a bank that immediately causes the bank's reserves held at the Fed to increase by $1 million,

then the T-account effects are that the bank's assets and liabilities ________ by $1 million and that the Fed's assets and liabilities ________ by $1 million. A) decline; decline B) increase; decline C) decline; increase D) increase; increase