When part of a bank loan does not return to the banking system ...

[charchew]

When part of a bank loan does not return to the banking system but rather remains outside the banking system as currency, then the money multiplier ________ in size and the amount of money created by an open market operation ________.
 
  A) increases; decreases
  B) does not change; increases
  C) decreases; decreases
  D) increases; increases
  E) decreases; does not change

Question 2

Refer to the figure above. The slope of the production function between ________ and ________ indicates negative returns to labor.
 
  A) Point B; Point C
  B) Point A; Point C
  C) Point A; Point B
  D) the origin; Point A

[mcni194]

Answer to Question 1

C

Answer to Question 2

A