Suppose There Is a Simultaneous Central Bank Sale of Bonds

question 69

Multiple Choice

Suppose there is a simultaneous central bank sale of bonds and tax increase. We know with certainty that this combination of policies must cause:

• A) a decrease in Y.
• B) an increase in i.
• C) an increase in M.
• D) a decrease in i.
• E) an increase in Y.

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Definitions:

Cerebral Cortex

The outer layer of the cerebrum in the mammalian brain, involved in various high-level brain functions such as thought, memory, and consciousness.

Cerebellum

A portion of the brain located at the back of the skull, responsible for coordinating voluntary movements, balance, and posture.

Hippocampus

A region of the brain that plays major roles in short and long-term memory and spatial navigation.

Brain Stem

The part of the brain that connects the spinal cord with the forebrain and cerebrum, crucial for regulating basic life functions such as breathing and heart rate.