The appropriate monetary policy action meant to decrease rapid inflation would be to increase (B or D?)

a. the purchase of treasury securities

b. raising marginal income tax rates

c. the sale of government bonds

d. money supply by reinvesting dividends

e. government spending through social welfare programs.

A news report claims that firms' expected rates of return are high as future business conditions are positive. What effect would this news have on the loanable funds market? (a or d?)

a. Interest rates increase and quantity of loanable funds increase

b. Interest rates increase and quantity of loanable funds decrease

c. Interest rates decrease and quantity of loanable funds decrease

d. Interest rates decrease and quantity of loanable funds increase

e. No change in interest rates and quantity of loanable funds increase

The central bank announces that it expects inflation to be relatively low while unemployment rises in the following months. What would be an expected monetary policy action as a result of this forecast?

a. Increase government spending

b. Decrease the discount rate

c. Increase the reserve ration

d. Sell bonds on the open market

e. Decrease marginal income tax rates.