1. The board of governors of the Fed _____
sets reserve requirements
sets fiscal policy
sets the Fed Funds rate
2. An increase in the marginal tax rate would likely _____ the demand for municipal bonds and _____ the demand for U.S. government bonds.
decrease; decrease
decrease; increase
increase; increase
increase; decrease
3. The Fed's objective with Operation Twist was to ____.
lower short-term interest rates
raise long-term interest rates
lower long-term interest rates
bailout European companies