Question

1. Which of the following increases when the Fed makes open-market sales?

A. neither currency nor reserves
B. currency but not reserves
C. currency and reserves
D. reserves but not currency

2. In the long run, policy that changes aggregate demand changes
A. neither unemployment nor the price level
B. only unemployment
C. only the price level
D. both unemployment and the price level

Answer 1

C andD

Step-by-step explanation:

When the Fed makes open-market sales there will be increase in currency and reserves

Answer to question 2

D. both unemployment and the price level.