According to the quantity theory of money, if velocity of money is constant, a 5 percent increase in money supply will lead to a 0.25 percent increase in nominal GDP

In the above figure, CBL is the cost of breaking the law. If it is illegal to buy and sell, then the price per unit will be

A) $500. B) $400. C) $300. D) $200.

Assume that the reserve—deposit ratio is 0.4. The Federal Reserve carries out open-market operations, purchasing $1,000,000 worth of bonds from banks. This action increased the money supply by $1,750,000. What is the reserve—deposit ratio?

A) 0.2 B) 0.3 C) 0.4 D) 0.5