An increase in the excess reserves banks want to hold, together with people depositing currency into their demand deposit accounts, would:
a. increase the money supply

Which of the following does NOT describe why Britain adopted the pegged system (the Exchange Rate Mechanism [ERM]) in 1990?

A) There were benefits to trade and other forms of cross-border exchange. B) Britain wanted to hold onto the pound as its currency. C) It was a member of the European Union and fixed rates were good for trade with other members. D) It hoped to participate in the new common currency when it was launched.

When a surplus exists in a market, sellers

a. raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. b. raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. c. lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. d. lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated.