Assume that the reserve—deposit ratio is 0.4. The Federal Reserve carries out open-market operations, purchasing $1,000,000 worth of bonds from banks. This action increased the money supply by $1,750,000. What is the reserve—deposit ratio?

Your textbook authors argue that the redemption efforts to free Sudanese slaves

A) generally succeeded until the government stepped in and created unintended shortages. B) worked poorly because slave surpluses became rampant. C) unintentionally increased profitability and slave supply. D) proved that underground markets do not coordinate the plans of participants.

The law of demand implies that:

A) consumers are not responsive to price changes. B) consumers will, all other things unchanged, buy more at lower prices. C) sellers will, all other things unchanged, offer more on the market at higher prices. D) sellers will, all other things unchanged, offer less on the market at lower prices.