The spread between the interest rates on bonds with default risk and default-free bonds is called the

Refer to Table 18-3. The table above outlines the rankings of three members of the U.S. Senate on three spending alternatives

Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Bart, Lisa, and Maggie, all members of the Senate, participate in a series of votes in which they are to determine which of the spending alternatives should receive funding. Three votes will be taken: (1 ) Immigration Reform and Unemployment Benefits (2 ) Immigration Reform and Social Security Reform and (3 ) Unemployment Benefits and Social Security Reform.

Suppose that the central bank must follow a rule that requires it to increase the money supply when the price level falls and decrease the money supply when the price level rises. If the economy starts from long-run equilibrium and aggregate demand shifts right, the central bank must

a. decrease the money supply, which will move output back towards its long-run level. b. decrease the money supply, which will move output farther from its long-run level. c. increase the money supply, which will move output back towards its long-run level. d. increase the money supply, which will move output farther from its long-run level.