If the prices of both goods and income increase by the same percentage, what will happen to the budget line?
A) The budget line rotates inward from the intercept on the axis of the good that did not change in price.
B) The budget line rotates outward from the intercept on the axis of the good that did not change in price.
C) The budget line shifts outward without a change in slope.
D) Nothing.
D
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If the Fed sells government bonds, bank reserves will
A) decrease leading to a decrease in the money supply. B) increase leading to a decrease in the money supply. C) increase leading to an increase in the money supply. D) decrease leading to an increase in the money supply.
During the German hyperinflation of the 1920s, the large increases in the money supply were generated by the German government
A) significantly raising the required reserve ratio to reduce business loans. B) significantly lowering the required reserve ratio to enable German businesses to obtain loans. C) selling large quantities of government bonds to the central bank, the Reichsbank. D) printing large quantities of German marks.