In the cigarette industry either R. J. Reynolds or Phillip Morris, for a time, raised prices twice a year by about 50 cents per carton. The other firms in the industry raised their prices by the same amount. Economists call this

As the central bank, the Federal Reserve System provides banking services to

A) banks and regulates financial institutions and markets. B) foreign corporations and determines the exchange rate. C) the government and the stock market. D) individuals and controls the quantity of money. E) banks and determines how much the U.S. government will borrow.

If reserves increase by $5 million, what is the difference in the resulting change in checkable deposits when the required reserve ratio is 12.5 percent compared to when it is 10 percent?

A) $12.5 million B) $10 million C) $2.5 million D) $100 million