In the Classical view, rising interest rates reduce

Economies of scale exist as a firm increases its size in the long run because of all of the following except

A) as a larger input buyer, the firm can purchase inputs at a lower per unit cost. B) as a firm expands its production, its profit margin per-unit of output increases. C) the firm can afford more sophisticated technology in production. D) labor and management can specialize even further in their tasks.

Decisions by depositors to increase their holdings of ________, or of banks to hold excess reserves will result in a ________ expansion of deposits than the simple model predicts

A) deposits; smaller B) deposits; larger C) currency; smaller D) currency; larger