Every dollar added to the total reserves of the commercial banking system
A) compels the banks to reduce their loans by more than a dollar.
B) compels the banks to expand their loans by more than a dollar.
C) enables the banks to expand their loans by more than a dollar.
D) enables the banks to expand their loans by one dollar.
E) is one less dollar in the hands of the public.
C
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In monopolistic competition, a firm can set the price for its product because of
A) easy entry and exit. B) economic profits. C) product differentiation. D) many competitors. E) the firm's upward sloping demand curve.
When economists use the terms "supply" and "demand," they are referring to
A) the roles economists must take to improve the economy. B) the plans and ongoing negotiations among individual traders in the market process. C) the ways people meet their needs in society. D) the supply of money and the demand for money. E) the supply of laws and the demand for laws in a well-governed society.