If the simple money multiplier is 5, the required reserve ratio must be equal to _____

The above figure shows the U.S. market for 1 carat diamonds. The free trade, the price in the United States for diamonds is equal to ________ and with the quota illustrated in the figure, the price in the United States is equal to ________

A) $2,000; $4,000 B) $2,000; $3,000 C) $4,000; $3,000 D) $4,000; $2,000 E) $2,000; $2,000

Suppose the central bank implements a monetary contraction that is fully expected by financial market participants. Given this information, we would expect

A) stock prices to rise. B) stock prices to fall. C) stock prices to remain unchanged. D) an ambiguous effect on stock prices. E) stock prices to fall and the interest rate to rise.