D Question 27 3 pts Crowding out O causes the AD curve to shift farther to the right after an increase in G O might happen if an increase in G causes interest rates to increase O. causes the AD curve to shift so far to the left that GDP is lower than before the increase in G O might happen if people buy more when interest rates increase D Question 28 3 pts If the Federal Reserve is worried about inflation, it would bonds to the money supply. This would interest rates causing the curve to shift to the on D Question 29 3 pts If the Fed were to lower the reserve requirement, the deposit multiplier would increase. could do any of the above. would decrease. would not change. D Question 30 3 pts Suppose banks decide to hold excess reserves because they are worried about the economy. This would cause the O money supply to fall. To reduce the impact of this the Fed could sell bonds. O money supply to increase. To reduce the impact of this the Fed could buy bonds. money supply to increase. To reduce the impact of this the Fed could sell bonds. O money supply to fall. To reduce the impact of this the Fed could buy bonds. D Question 31 3 pts Suppose there was a large increase in net exports. If the Fed wanted to stabilize output (bring GDP back to potential output), it could O sell bonds to decrease the money supply. O buy bonds to increase the money supply. O sell bonds to increase the money supply. O buy bonds to decrease the money supply. D Question 32 3 pts Purchases and sales of government securities by the Federal Reserve are called open market operations. swap transactions. discount loans. federal fund transfers