Bell Bank has $2 million in deposits and $1 million in reserves, with a reserve requirement ratio of 12 percent. If the Fed lowers the reserve requirement ratio to 10 percent, Bell Bank’s new excess reserves could potentially expand the money supply by ______.

The MPC shows the relationship between:

a. interest rates and investment. b. disposable income and consumer spending. c. saving and investing. d. inflation and unemployment

In the long run a company that produces and sells organic tofu incurs total costs of $1,200 when output is 1,200 units and $1,650 when output is 1,400 units. The tofu company exhibits

a. diseconomies of scale because total cost is rising as output rises. b. diseconomies of scale because average total cost is rising as output rises. c. economies of scale because total cost is rising as output rises. d. economies of scale because average total cost is falling as output rises.