30. An increase in household saving causes consumption to A. rise and aggregate demand to increase. B....

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Economics

30. An increase in household saving causes consumption to
A. rise and aggregate demand to increase.
B. rise and aggregate demand to decrease.
C. fall and aggregate demand to increase.
D. fall and aggregate demand to decrease.
35. Which of the following Fed actions would both decrease themoney supply?
A. buy bonds and raise the reserve requirement
B. buy bonds and lower the reserve requirement
C. sell bonds and raise the reserve requirement
D. sell bonds and lower the reserve requirement
38. Sometimes during wars, government expenditures are largerthan normal. To reduce the effects this spending creates oninterest rates,
A. the Federal Reserve could increase the money supply by buyingbonds.
B. the Federal Reserve could increase the money supply byselling bonds.
C. the Federal Reserve could decrease the money supply by buyingbonds.
D. the Federal Reserve could decrease the money supply byselling bonds.

Answer & Explanation Solved by verified expert

3.9 Ratings (496 Votes)

30An increase in housheold saving causes consumption to Dfall and aggregate demand to decrease When there is an increase in the household savingit simply means that people start to save moreAs a result they have less disposable income in hand which in turn decreases their consumptionAn increase in the household saving causes consumptiom to fall and not riseWhen consumption falls it affects the aggregate demand See Answer

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