Everything else remaining unchanged, if the demand curve for reserves shifts to the left and borrowed reserves is zero:
A) there will be a decrease in both the federal funds rate and the quantity of reserves.
B) there will be a decrease in the federal funds rate but no change in the quantity of reserves.
C) there will be an increase in the federal funds rate but no change in the quantity of reserves.
D) there will be an increase in both the federal funds rate and the quantity of reserves.
B
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Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. Which of the following is true?
A) Both 10,000 and 30,000 are economically inefficient rates of output. B) If the price of iced tea is $3, consumers will purchase more than the economically efficient output. C) If the price of iced tea is $3, the output will be economically efficient but there will be a deadweight loss. D) If the price of iced tea is $3, producers will sell 30,000 units of iced tea but this output will be economically inefficient.
The aggregate demand curve shows how real GDP purchased varies with changes in:
A. unemployment. B. the price of a particular good. C. the overall price level. D. the interest rate.