If the demand curve is perfectly elastic, the elasticity ...

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If the demand curve is perfectly elastic, the elasticity coefficient is ____ and the curve is ____.
 a. zero, vertical
 b. infinity, horizontal
  c. zero, horizontal
 d. infinity, vertical

Question 2

Which of the following combinations would unambiguously decrease the supply of money?
 a. The Fed pays a lower interest rate on bank reserves and increases the required reserve ratio.
 b. The Fed conducts an open market purchase of government securities and raises the discount rate.
 c. The Fed pays a higher interest rate on bank reserves and conducts an open market purchase of government securities.
  d. None of the above would unambiguously decrease the supply of money.

[mohan]

Answer to Question 1

b

Answer to Question 2

a

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Thanks for the timely response, appreciate it

[diana chang]

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