Under the liquidity premium theory, if investors expect short-term interest rates to remain constant, the yield curve should:

A decrease in the excess reserves banks want to hold, together with people depositing currency into their demand deposit accounts, would: a. increase the money supply

b. decrease the money supply. c. leave the money supply unchanged. d. have an indeterminate effect on the money supply.

An increasing-cost industry will have

A) a perfectly elastic long-run supply curve. B) a perfectly inelastic long-run supply curve. C) an upward sloping supply curve in the long run. D) an upward sloping demand curve in the long run.