Which of the Following Would Tend to Increase AD

question 117

Multiple Choice

Which of the following would tend to increase AD?

• A)a commercial bank using excess reserves to extend a loan to a customer
• B)a commercial bank purchasing U.S. securities from the Fed as an investment
• C)an increase in reserve requirements
• D)an increase in the discount rate
• E)a purchase of U.S. government securities by the Fed

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Definitions:

Consumer Tastes

Preferences or desires of consumers regarding certain products or services, which can influence buying behavior and market trends.

Externalities

The cost or benefit that affects a party who did not choose to incur that cost or benefit, affecting third parties outside the transaction.

Market for Product X

The demand and supply conditions, participants, and interactions specific to a particular product, designated as "Product X."

Overallocation of Resources

A situation where too many resources are devoted to a particular area of the economy, potentially leading to inefficiencies and waste.