Holding supply constant, a reduction in demand leads to
A) lower prices and higher quantity supplied.
B) lower prices and lower quantity supplied.
C) higher prices and higher quantity supplied.
D) higher prices and lower quantity supplied.
B
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Everything else being equal, one can expect the euro to appreciate relative to the dollar if
a. Americans decrease their travel to Germany. b. the Germans add to their holdings of U.S. Treasury bills. c. Americans purchase land in Germany and build factories. d. American exports to Germany increase.
The primary reason commercial banks must keep required reserves on deposit at the Fed is to:
A. Add to the liquidity of the commercial bank B. Allow the Fed to control the amount of bank lending C. Protect the deposits in the commercial bank against losses D. Ensure that depositors can withdraw their money if they wish to