The decrease in consumer surplus and producer surplus that results from an inefficient level of production is called the

When the Fed buys a U.S. bond in the open market

A) its action contracts total reserves and the money supply. B) total reserves increase by the amount of the purchase but the money supply stays the same. C) its action expands total reserves and the money supply. D) its action has no effect on the total reserves or the money supply because the check it writes increases reserves at one bank but they fall at another.

The income effect of an increase in the price of peaches is

A) the change in the quantity of other fruit demanded that results from the impact of the price change on purchasing power, holding all other factors constant. B) the change in the quantity of peaches demanded that results from the effect of the change in price on consumer purchasing power, holding all other factors constant. C) the change in the demand for peaches as a result of the change in the price of peaches, holding all other factors constant. D) the change in the quantity of peaches demanded that results from the price increase, making peaches more expensive than other fruit, holding constant the effect of the price change on consumer purchasing power.