Something that motivates or encourages people to take an action is referred to as a(n)

Suppose that the Treasury decides to spend $12 billion on a given day

Because about $12 billion in new tax revenues are expected to replenish the Treasury's account at the Fed a week later, the best policy for the Fed to pursue if it wishes to stabilize reserves is to A) do a $12 billion government security repurchase agreement. B) do a $12 billion government security reverse repurchase agreement. C) buy $12 billion in government securities outright and hold them to prevent bank reserves from falling. D) sell $12 billion in government securities to prevent bank reserves from rising.

Exhibit 16-5 Money, investment and product markets In Exhibit 16-5, a shift in aggregate demand from AD1 to AD2:

A. cannot raise real GDP because the economy is at full employment. B. cannot raise real GDP because the aggregate supply curve is upward sloping at GDP2. C. will raise real GDP because the economy is operating below the full-employment level. D. will cause the interest rate to increase from i2 to i1.