The excess reserves ratio is ________ related to expected deposit outflows, and is ________ related to the market interest rate

Nicole is indifferent between option A, which gives her $20,000 for sure, and option B, which gives her $10,000 with probability 0.5 or $32,000 with probability 0.5. Nicole's cost of risk for option B is

A) zero. B) $1,000. C) $2,000. D) $20,000.

Everything else held constant, an increase in the required reserve ratio on checkable deposits causes the M1 money multiplier to ________ and the money supply to ________

A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease