Economics 15th Edition by James Gwartney,Richard Stroup,Russell Sobel,David Macpherson

Exercise 6

If the Fed shifts to a more restrictive monetary policy, it will generally sell some of its current holdings of bonds in the open market. How will this action influence each of the following? Briefly explain each of your answers.
a. the reserves available to banks
b. real interest rates
c. household spending on consumer durables d. the exchange rate value of the dollar
e. net exports
f. the prices of stocks and real assets like apartment or office buildings
g. real GDP