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

In a competitive market, a negative externality creates a deadweight loss because

A) the cost of the externality is double counted. B) a harm is generated. C) price equals social marginal cost. D) price equals private marginal cost.

Answer the following statements true (T) or false (F)

1. A linear relationship only refers to one whose graph is either vertical or horizontal. 2. In graphing a relationship between two variables, economists always follow the mathematical convention. Thus, if price is the independent variable then it is measured on the horizontal axis. 3. An assumption is usually made in a two-axes (or two-dimensional) graph that, aside from the two variables under study, the influence of all other variables or factors is assumed to be constant. 4. The slope of a graph measures the rate of change in one variable as the other variable changes.