Other things equal, when U.S. money moves to other countries to take advantage of better foreign investment opportunities, then:
a. the U.S. money supply will increase.
b. the reserve requirement for U.S. banks will rise.
c. the U.S. money supply will decrease.
d. U.S. banks will have excess reserves to loan out.
e. the effect of the U.S. deposit expansion multiplier will be increased.
Question 2
If the price of a good decreased,
a. It would also increase the quantity exchanged if it was caused by an increase in demand.
b. It would also decrease the quantity exchanged if it was caused by an increase in supply.
c. We would not know how quantity would change if we didn't know whether it was due to a change in demand or a change in supply.
d. All of the above would be true.
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