42. Which of the following is not a function of the Fed?

a. lending funds to private firms

b. regulating the money supply

c. holding reserves of depository institutions

d. supervising member banks

46. In the Keynesian model a recessionary gap is caused by

a. high prices

b. a high level of unemployment

c. a low level of aggregate demand

d. a high level of aggregate demand

47. When there is a recessionary expenditure gap in the economy the level of output

in the economy

a. is equal to potential GDP or the LRAS level of output

b. is more than the potential GDP or the LRAS level of output

c. is less than potential GDP or the LRAS level of output

d. is less than what demanded