Use the following table to answer the next question. The money supply and investment are in billions.Money Supply (billions of dollars)Interest RateInvestment (billions of dollars)$507%$100606110705120804130903140Assume that the MPC is 0.9 and the reserve requirement is 0.2. If the Federal Reserve needs to decrease aggregate demand by $100 billion at each price level to move the economy back to full employment and the current interest rate is 4%, then the Federal Reserve should ________ bonds on the open market equal to ________.

Refer to Figure 3-4. If the current market price is $10, the market will achieve equilibrium by

A) a price decrease, decreasing the supply and increasing the demand. B) a price increase, increasing the quantity supplied and decreasing the quantity demanded. C) a price decrease, decreasing the quantity supplied and increasing the quantity demanded. D) a price increase, increasing the supply and decreasing the demand.

In order to use inflation targeting, a central bank must:

a. be independent of fiscal policy. b. be dependent on fiscal policy. c. focus on money supply. d. focus on unemployment. e. focus on stable exchange rates.