If the demand for a product is elastic, the quantity demanded changes by a larger percentage than the percentage change in price

The Fed conducts an open market purchase of $10 million in government securities. If the reserve ratio is 20%, what is the maximum change in the money supply? Assume banks hold no excess reserves and there is no currency withdrawal from the banking system.

A) maximum increase in money supply = $10 million B) maximum decrease in money supply = $10 million C) maximum increase in money supply = $50 million D) maximum decrease in money supply = $50 million

Which statement is false?

A. President Eisenhower presided over three recessions. B. At the close of the 20th century the unemployment rate was below 5 percent. C. The United States' longest economic expansion was for six years during the Reagan Administration. D. None of the choices are false.