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Time inconsistency arises when the government A does not know how to achieve its long-term goals, B does not explicitly state its long-term goals, often changes its long-term goals, D is willing to deviate from its long term goals for the sake of short run gain e Sunday by If the Fed has complete control over the money supply, the interest rate is determined by the A money multiplier. B monetary base. currency to deposit ratio, demand for money Quantitative easing increases all the following EXCEPT A reserves the money supply the monetary base. D interest rates Exchange market interventions involve A fixing the exchange rate through purchases and sales of currency. B fixing the prices of goods imported from foreign countries. imposing a tariff on all foreign imports. D allowing the currency exchange rate to be determined by the foreign exchange markets Suppose that the Fed aims at fixing the interest rate. The Fed will respond to an increase in money demand with A open market sales in some markets and open market purchases in other markets. B open market sales no policy action D open market purchases. Which of the following affects the Fed's interest rate decisions? (Check all correct answers.) A the level of potential GDP. B the level of inflation the gap between real GDP and potential GDP D the level of wages relative to output prices

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