The reserve requirement is 4 percent, banks hold no excess reserves and people hold no currency. If the Fed sells $10,000 worth of bonds, what happens to the money supply?

If a country sets a pegged exchange rate that is above the equilibrium exchange rate, how can the country maintain the peg?

A) by purchasing surplus domestic currency at the pegged rate B) by purchasing surplus domestic currency at the equilibrium exchange rate C) by selling surplus domestic currency at the pegged rate D) by increasing the pegged exchange rate

If demand is perfectly inelastic, the absolute value of the price elasticity of demand is

A) more than one. B) less than one. C) zero. D) equal to the absolute value of the slope of the demand curve.