Suppose the required reserve ratio is 8% and that banks hold no excess reserves and the public does not change its currency holdings. If the Fed sells $5 million worth of securities, what happens to the amount of deposits in the banking system?

The ________ effect means that, other things remaining the same, the higher the wage rate, the less time people will spend working and the more time people will spend at leisure

A) price B) labor C) income D) substitution

Refer to the graph below. At equilibrium, the total revenues received by sellers would be represented by the area:

The equilibrium point in the market is where S and D curve intersect.



A. b
B. b + c
C. a + b
D. b + c + d