Whenever the Fed ________ excess reserves in the banking system, ...

[LaDunn]

Whenever the Fed ________ excess reserves in the banking system, they tend to ________ the overall money supply.
 
  A) raises; reduce
  B) raises; increase
  C) lowers; increase
  D) lowers; stabilize

Question 2

Which of the following statements is true of the long run?
 
  A) Identical firms can enjoy positive economic profits.
  B) Identical firms face an upward-sloping supply curve.
  C) Non-identical firms can enjoy positive economic profits.
  D) Non-identical firms face a horizontal supply curve.

[Tonny]

Answer to Question 1

B

Answer to Question 2

C