The interest rate which the Fed charges banks that borrow reserves from it is the:

The degree of responsiveness of aggregate output to a price change declines as the:

a. rate of savings increases. b. economy approaches its maximum potential output. c. level of real GDP declines over time. d. the price elasticity of imports declines. e. the excess capacity of all the firms in the economy increases over time.

If the Fed buys government bonds in the open market,

A. interest rates will rise and investment spending will decrease. B. interest rates and investment spending will remain unchanged but inflation will increase. C. interest rates will fall and investment spending will increase. D. banks' excess reserves will be reduced and loans will be called in, leading to an increase in bankruptcies.