Author Question: If the supply curve is perfectly elastic, then an increase in demand will: a. increase both the ... (Read 54 times)

audragclark · **on:** Jun 30, 2018

If the supply curve is perfectly elastic, then an increase in demand will:
a. increase both the price and the quantity exchanged.
b. increase the price but result in no change in the quantity exchanged.
c. increase the quantity exchanged but result in no change in the price.
d. decrease the price but not change the quantity exchanged.

Question 2

Why is the money multiplier considered to be a potential multiplier rather than an indication of exactly how much multiplication should be expected?

kalskdjl1212 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

c

Answer to Question 2

Some banks may not choose to loan out all of their excess reserves. In addition, some of the funds that were borrowed may not end up being re-deposited into the checking accounts or any accounts within the U.S. banking system.