Money expansion stops when new reserves introduced into the banking system have been converted into:
a. excess reserves

If lower-income households spend a greater share of their income on cigarettes than do higher-income households, then a tax that raises the price of cigarettes will

A) cause lower-income households to incur a greater loss of consumer surplus than that incurred by higher-income households. B) cause higher-income households to incur a greater loss of consumer surplus than that incurred by lower-income households. C) raise consumer surplus among higher-income households. D) cause consumer surplus to decline among smokers, but the relative impact cannot be determined from the given information.

If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is

A) unit elastic. B) perfectly elastic. C) relatively inelastic. D) relatively elastic.