12 & 13

12. Assume the economy is operating at less than full employment. An expansionary monetary policy will cause interest rates to _, which will investment spending. A. decrease; decrease B. decrease; increase C. increase; increase D. increase; decrease 13. If the Federal Reserve System buys government securities from commercial banks and the public, then A. commercial bank reserves will decline B. commercial bank reserves will be unaffected C. it will be easier to obtain loans at commercial banks D. the money supply will contract