The sum of the number of employed people and the number of unemployed people equals the labor force of a country

When the Fed buys U.S. government securities, the money supply

A) increases because there is an increase in transaction deposits at the bank of the bond dealer but there is no decrease in transaction deposits at any other bank. B) decreases because there is an increase in the reserves of the bond dealer's bank. C) remains unchanged because the increase in transaction deposits at the bond dealer's bank is offset by a reduction in transaction deposits at the Fed. D) remains unchanged because the increase in transaction deposits at the bond dealer's bank is offset by a fall in transaction deposits at another bank.

The reason a profit-maximizing natural monopolist cannot set price equal to marginal cost is that it would:

A. then be forced to produce more than it could sell. B. suffer losses since price would be less than average cost. C. earn excessive profits, which would attract new firms into the market. D. then be forced to produce more than the socially optimal level of output.