An increase in the reserve requirement from 20 percent to 25 percent is most likely to:
a. reduce total deposits in the banking system.
b. reduce excess reserves and the deposit expansion multiplier.
c. increase the money supply.
d. reduce the amount of reserves required.
e. increase total deposits and the deposit expansion multiplier.
Question 2
Ceteris paribus, if negotiations lead to lower wages for airline employees, what will be the result in the market for air travel?
a. an increase in equilibrium price and an increase in equilibrium quantity
b. an increase in equilibrium price and a decrease in equilibrium quantity
c. a decrease in equilibrium price and an increase in equilibrium quantity
d. a decrease in equilibrium price and a decrease in equilibrium quantity
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