In the long run an increase in the money supply causes the price level to __________. The price level moves in this direction because an increase in the money supply creates __________ in the money market that causes people to ________ spending

Commercial banks' assets include ________

A. bank deposits of individuals and businesses and bank reserves B. loans to individuals and businesses and government securities C. bank reserves and the deposits in M2 D. government securities and borrowed funds

What happens when the price decreases in the case of a product that has elastic supply?

(A) Existing producers expand, and new producers enter the market. (B) Some producers produce less, and others drop out of the market. (C) New firms enter the market as older ones drop out. (D) Existing firms continue their usual output, but they earn less.