If the public has correct rational expectations and the Fed increases both reserve requirements and the discount rate, it would be expected to result in:
a. a higher level of real output and a lower price level.
b. a lower price level but no change in real output

Direct finance involves ________

A) borrowing monies from commercial banks B) issuing securities in financial markets C) borrowing from the Federal Reserve System D) issuing insurance policies

Keynesians challenge the classical or monetarist view that payment schedules and patterns of spending and saving associated with the transactions demand for money are basically stable

Indicate whether the statement is true or false