The equation of exchange states that the quantity of money multiplied by the number of times this money is spent in a given year must equal

A fall in the price of X from $12 to $8 causes an increase in the quantity of Y demanded from 900 to 1,100 units. What is the cross elasticity of demand between X and Y?

A) 0.5 B) -0.5 C) 2 D) -2

The stock of high-powered money in the economy is $80 billion. The bank reserve-holding ratio is 0.12 and the public wishes to hold 10% of its deposits as cash. The money supply will be approximately

A) $363 billion assuming the 80 billion of high-powered money is held by banks. B) $400 billion assuming the 80 billion of high-powered money is held by the Fed or in bank vaults. C) $327 billion assuming the 80 billion of high-powered money is not held by the Fed or in bank vaults. D) $425 billion assuming the 80 billion of high-powered money is held by banks.