Firms want to capture consumer surplus

How will the purchase of $100 million of government securities by the Federal Reserve change bank reserves and total checking account deposits in the banking system as a whole? Assume that banks do not hold any excess reserves, that households and

firms do not change the amount of currency they hold, and that the required reserve ratio is 20 percent.

In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift down, the equilibrium level of aggregate output to ________, and the IS curve to shift to the ________,

everything else held constant. A) rise; left B) rise; right C) fall; left D) fall; right