The cross-price demand for capital (relative to the wage) may slope up or down.

When Maria deposits $100 in currency in her checkable deposit at Bank of America, the immediate effect is that the quantity of M1 ________ because ________

A) changes only if Bank of America has excess reserves; if the bank does not have excess reserves, the overall effect to M1 is too small to notice B) decreases; checkable deposits are included in M2 but are not included in M1 C) does not change; both currency and checkable deposits are included in M1 D) changes, but the direction of the change cannot be determined; the direction of the change depends on what Bank of America does with the deposit E) increases; both currency and checkable deposits are included in M1

If a union sets the wage rate to maximize the total wage receipts of its members, the price elasticity of demand for labor would be

A) zero. B) numerically equal to 1. C) finite, but greater than -1. D) positive, but less than 1.