Refer to Figure 6.1. Suppose the economy is originally in steady state at k*1. If the saving rate increases from s1 to s2,

Which of the following would cause the U.S. money supply to expand?

a. a commercial bank using excess reserves to extend a loan to a customer b. a commercial bank purchasing U.S. securities from the Fed as an investment c. an increase in reserve requirements d. an increase in the discount rate

If we sum the private marginal cost curves of firms producing nuclear power, we create the

a. industry supply curve for nuclear power b. market equilibrium for nuclear power c. total value of the negative externalities generated by nuclear power d. optimal allocation of resources associated with nuclear power e. marginal externality cost curve for nuclear power