Government purchases and income taxes have the same effect on the multiplier

Suppose a firm is a natural monopoly. Then, until the long-run average cost curve crosses the demand curve, as the quantity increases the long-run average costs

A) increase. B) decrease. C) decrease and then increase. D) increase and then decrease.

If a bond dealer sells a government bond to the Fed for $100,000, and the reserve ratio is 10 percent, then the bank that receives a $100,000 deposit from the dealer can expand its loans by ________,

and the money supply can increase by as much as ________. A) $80,000; $800,000 B) $10,000; $100,000 C) $90,000; $1,000,000 D) $90,000; $900,000