Refer to Figure 9.6. Before this policy was implemented, consumer surplus was

Which of the following would make the equilibrium real interest rate increase and the equilibrium quantity of funds decrease?

a. The demand for loanable funds shifts right. b. The demand for loanable funds shifts left. c. The supply of loanable funds shifts right. d. The supply of loanable funds shifts left.

Suppose that the Federal Reserve Open Market Committee adheres to the ideas expressed by ________. If the economy moves into a recession, the Fed would recommend that the federal funds target rate decrease as long as the inflation rate did not rise above

the publicly announced goal for inflation. A) the gold standard B) the monetarist school of thought C) inflation targeting D) the Taylor Rule