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Question 1

Suppose the Fed buys T-bills.

As a result of this policy, what will happen to the Aggregate Demand (AD)?

 

Hint


Question 2

Suppose the Fed sells T-bills.

As a result of this policy, what will happen to the Aggregate Demand (AD)?

 

Hint


Question 3

Suppose interest rates increase.

As a result of this, what will happen to consumption (C) and investment (I)?

 

Hint


Question 4

Suppose interest rates decrease.

As a result of this, what will happen to consumption (C) and investment (I)?

 

Hint


Question 5

Suppose the Fed buys T-bills.

As a result of this policy, what will happen to price level and GDP in the short-run?

 

Hint


Question 6

Suppose the Fed increase required reserve ratio.

As a result of this policy, what will happen to price level and GDP in the short run?

 

Hint