Refer to the graph below. Assume that the economy is initially at full-employment equilibrium at point A. If AD increases, then the long run equilibrium point will be at point:

The reason that the Fed does not actively use discount rate policy to control the money supply is because the Fed

a. acts when a majority of member banks agree on policy and the banks rarely agree. b. earns interest on discounting and cannot afford to lose the revenue. c. does not know how banks will respond to discount rate changes. d. has been directed by Congress to set the discount rate at a permanent level.

During the height of the euro-are crisis, deposits at the ECB's deposit facility surged above €800 billion because:

A. euro area commercial banks preferred the safety of deposits at the central bank. B. euro area commercial banks preferred lending to other commercial banks. C. euro area commercial banks were compelled to increase deposits by ECB policy changes. D. the deposit rate increased.