Multiple Choice
If there is a sudden increase in government spending,which of the following should the Fed do if it wants to keep output unchanged?
A) Do nothing,since the self-correcting mechanism will adjust the economy
B) Sell bonds in the open market
C) Wait,since output usually does not change when government spending increases
D) Decrease the required reserve ratio
E) Buy bonds in the open market.
Correct Answer:
Verified
Correct Answer:
Verified
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