Prevent bank reserves from falling

Reference no: EM1374568

1. Suppose if the public's demand for United States currency rise 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: EM1374568

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