Quarterly data for the years 1988-93 for the nominal federal funds interest rate and the output ratio show that the Fed
A) reacted to a high output ratio by raising the interest rate.
B) reacted to a high output ratio by lowering the interest rate.
C) reacted to low output ratios but not to high output ratios.
D) did not react to movements in the output ratio.
A
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The popular and dominant school of economists in the 1930s who could not explain why the economy went into a depression were the:
A. Classical School. B. Austrian School. C. Mercantilists. D. Ricardians.
The major problem facing the economy is high unemployment and weak economic growth. The inflation rate is low and stable. Therefore, the Federal Reserve decides to pursue a policy to increase the rate of economic growth. Which policy changes by the Fed would tend to offset each other in trying to achieve that objective?
A. Selling government securities and raising the discount rate. B. Buying government securities and raising the discount rate. C. Buying government securities and lowering the reserve requirement. D. Selling government securities and raising the reserve requirement.