The Fed sells a U.S. government security and a bank dealer writes a check for the amount. When the check clears
A) reserves remain unchanged because the decrease of reserves at the dealer's bank is offset by an increase in the reserves at the Fed.
B) reserves have fallen by the amount of the reserves times the reserve ratio, and the money supply falls by the difference between the amount of the check and the fall in the reserves.
C) reserves have fallen by the amount of the check because the Fed clears the check by reducing the bank's deposits at the Fed.
D) reserves increase by the amount of the check because the Fed clears the check by increasing the amount of the bank's deposits with the Fed.
C
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If political unrest abroad substantially reduces the supply of copper to the United States, the price of copper will rise by a larger amount
A) the more elastic the demand for copper. B) the more inelastic the demand for copper. C) the more elastic the supply of copper. D) the more inelastic the supply of copper.
Credit cards are not a form of money because
A) money needs to be tangible (not virtual). B) credit cards just extend a loan. C) credit cards just relate to an account. D) credit card balances are in fact counted as money.