A 25 decrease in the price of breakfast cereal leads to a 20 increase in the quantity of cereal demanded. As a result:
a. total revenue will decrease.
b. total revenue will increase.
c. total revenue will remain constant.
d. the elasticity of demand will increase.
Question 2
If the required reserve ratio was increased, then:
a. the money supply would tend to decrease, but the outstanding loans of banks would tend to increase.
b. both the money supply and the outstanding loans of banks would tend to decrease.
c. the money supply would tend to increase, but the outstanding loans of banks would tend to decrease.
d. both the money supply and the outstanding loans of banks would tend to increase.
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