Given an upward-sloping aggregate supply curve, which of the following is most likely to occur if the Fed pursues restrictive monetary policy, ceteris paribus?
A. The equilibrium price level and output will both decrease.
B. The equilibrium price level and output will both increase.
C. The equilibrium price level will decrease but output will stay the same.
D. The equilibrium output will decrease but the price level will stay the same.
A. The equilibrium price level and output will both decrease.
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Which of the following measures did the Fed take during the uncertain days following the terrorist attacks of September 11, 2001? a. The Fed tightened regulations in the financial markets
b. The Fed increased the discount rate. c. The Fed bought all the government securities up for sale. d. The Fed increased the reserve requirement ratio. e. The Fed demanded interest on the bank reserves held at the Fed.
Persons who argue against the deliberate use of fiscal and monetary policies to smooth out the business cycle are referred to as
A) nonactivists. B) fine-tuners. C) activists. D) b and c E) none of the above