If the Fed buys securities worth 10 million, then :

If the Fed buys securities worth 10 million, then
 
  A) bank reserves will increase by 10 million.
  B) bank reserves will decrease by 10 million.
  C) currency in circulation will increase by 10 million.
  D) bank holdings of securities increase by 10 million.

Question 2

An increase in the actual rate of inflation is most likely to cause a decrease in ________.
 
  A) the ex post real interest rate
  B) the ex ante real interest rate
  C) the nominal interest rate
  D) the expected real interest rate
  E) none of the above

Question 3

Adaptive expectations are formed ________.
 
  A) from experience
  B) from best guesses about the future
  C) as new information becomes available
  D) as a weighted average of expert forecasts