At the moment, the Federal Reserve keeps the discount rate above the fed funds rate. In so doing, they are
A) discouraging commercial banks from borrowing from the Fed.
B) encouraging commercial banks to borrow from each other.
C) doing both A and B.
D) doing none of the above.
C
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Which of the following is not implied by the quantity equation?
a. If velocity is stable and money is neutral, an increase in the money supply creates a proportional increase in nominal output. b. If velocity is stable and money is neutral, an increase in the money supply creates a proportional increase in the price level. c. With constant money supply and output, an increase in velocity creates an increase in the price level. d. With constant money supply and velocity, an increase in output creates a proportional increase in the price level.
Which of the following is assumed when constructing a production possibilities curve?
A. the efficient use of resources B. a fixed amount of resources C. resources of a given quality D. All of these are correct.