If the amount of high-powered money were 100 and the bank reserve holding ratio was 0.25 then the maximum stock of deposits would be (assuming that all money is deposited in the banking system)

For a given level of equilibrium GDP, a tight-money/easy-fiscal policy mix compared with easy-money/tight-fiscal policy mix implies a

A) lower interest rate. B) lower level of investment. C) higher level of taxation. D) lower level of government expenditures.

If the Fed were to announce that fighting inflation is not a high priority for the immediate future ________

A) households might expect higher inflation B) the short run aggregate supply would shift upwards C) firms might begin raising their prices to keep up with expected inflation D) all of the above E) none of the above