A bank holds its reserves as ________ and ________

If banks are currently holding zero excess reserves and the Fed raises the required reserve ratio, which of the following will happen?

A) Banks will have a reserve deficiency. B) Banks will have positive excess reserves. C) Banks will begin to extend more loans. D) Banks will begin to extend more credit. E) b and d

List prices on new cars do NOT change very often, so

A) the real price of cars is very inflexible. B) the prices of new cars can only be flexible if there are changes in the cost of materials. C) price flexibility is not an important feature in the auto market. D) price flexibility shows up primarily through the negotiations between buyers and sellers.