Elucidate action in the open market would the fed

Reference no: EM1338434

Aggregate Demand schedule

1. If the public's demand for US currency increased by $100 Million what action in the "open market" would the Fed have to take to prevent bank reserves from falling?

2. Which of the following A or B would have a larger impact on AD? Explain your answer.

A) A program of tax rebates distributed uniformly across the population of households filing tax returns, amounting to $10 billion total.

B) A $10 billion increase in federal government spending on repairs to highways and bridges.

Reference no: EM1338434

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