The government used the Herfindahl-Hirschman index to determine if a proposed merger will lead to excessive concentration.

If an economy has a velocity of circulation of 3, then

A) the quantity of money is 3 times real GDP. B) in a year the average dollar is exchanged 3 times to purchase goods and services in GDP. C) nominal GDP is 1/3 the size of the quantity of money. D) the quantity of money is $3 for every dollar of GDP.

Assume a demand deposit multiplier of 2 and a government expenditure of $10 million. If the Treasury borrows that much from the banking system, bank reserves will

A) rise by $2 million. B) rise by $10 million. C) rise by $20 million. D) remain unchanged.