In 1921, prices surged, causing a decrease in average real wages

Explain dynamic and defensive open market operations. What is the purpose of each type? Describe two situations when defensive open market operations are used. How are defensive open market operations typically conducted?

What will be an ideal response?

When individuals shift funds from money market mutual funds to no-load stock and bond mutual funds,

a. the growth rate of M1 will decline but the growth of M2 will be unaffected. b. the growth rate of M2 will decline but the growth of M1 will be unaffected. c. the growth rate of both M1 and M2 will decline. d. the growth rate of both M1 and M2 will increase.