The greater the elasticities of supply and demand, the smaller are the gains from trade

If the quantity of money demanded exceeds the quantity of money supplied, then the

A) equilibrium interest rate will decrease. B) equilibrium interest rate will increase. C) equilibrium interest rate stays the same. D) effect on the equilibrium interest rate is indeterminate.

Refer to the scenario above. How much should he pay for the painting if he thinks that there is a 70% chance that the painting he is buying is original?

A) $50,000 B) $35,000 C) $70,000 D) $15,000