Other things remaining the same, if a nation's price level rises, ...

[Yi-Chen]

Other things remaining the same, if a nation's price level rises, the demand to hold money:
 a. Falls.
  b. Rises.
  c. Does not change.

Question 2

Suppose the national government increased taxes by 20 billion. The net effect on the banking system would be to:
 a. Reduce bank reserves by 20 billion and reduce bank deposits by 20 billion.
  b. Increase bank reserves by 20 billion and increase bank deposits by 20 billion.
  c. Increase government checking accounts in the banking system by 20 billion and reduce the public's checking accounts there by 20 billion.
  d. Decrease government checking accounts in the banking system by 20 billion and increase the public's checking accounts there by 20 billion.
  e. Increase government checking accounts in the banking system by 20 billion and increase the public's checking accounts there by 20 billion.

[Smiles0805]

Answer to Question 1

.B

Answer to Question 2

.C

[Yi-Chen]

Excellent

[flexer1n1]

TYSM