Suppose you find 1000 in your attic and decide to deposit it all into your local bank, which must hold 10 as required reserves. The deposit expansion multiplier suggests that this 1,000 injection of new money can, in the theoretical limit,
A) increase the money supply by a little more than 1,000.
B) increase the money supply by a little less than 1,000.
C) increase the money supply by only 1,000.
D) increase the money supply by 10,000.
Question 2
If a number greater than the mean (average) of a series of observations is added to the series, the new mean is:
A) greater than the original mean.
B) smaller than the original mean.
C) same as the original mean.
D) either greater or smaller than the original mean depending on the number of observations in the series.
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