1. $24. $36. $17. $48. 2. Other things equal, an increase in productivity will:

ID: 1218442 • Letter: 1

Question

$24.

$36.

$17.

$48.

Other things equal, an increase in productivity will:

reduce both the interest rate and the international value of the dollar.

reduce aggregate supply and increase real output.

increase both aggregate supply and real output.

increase net exports, increase investment, and reduce aggregate demand.

Operation Twist:

was intended to raise short-term interest rates and lower long-term rates until the two were equal.

involved the Fed simultaneously selling long-term government bonds and buying short-term government bonds.

ended the forward commitment policy of the Fed.

involved the Fed simultaneously selling short-term government bonds and buying long-term government bonds.

1 The maximum money-creating potential of the commercial banking system is:

Ans: $48.

2. Other things equal, an increase in productivity will:

Ans: increase both aggregate supply and real output.

3. Operation Twist:

Ans: involved the Fed simultaneously selling short-term government bonds and buying long-term government bonds.

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