Question 1. If the public's demand for US currency increased by $100 Million what action in the "open market" would the Fed have to take to prevent bank reserves from falling?
Question 2. Which of the following A or B would have a larger impact on AD? Explain your answer.
A) A program of tax rebates distributed uniformly across the population of households filing tax returns, amounting to $10 billion total.
B) A $10 billion increase in federal government spending on repairs to highways and bridges.