Assume a simplified banking system subject to a 25 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000 . the money supply:
a. increases $100,000 b. increases $400,000.
c. increases $125,000 d. decreases $500,000.
b
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Lee and Cody are playing a game in which Lee has the first move at A in the decision tree shown below. Once Lee has chosen either aggression or cooperation, Cody, who can see what Lee has chosen, must choose either aggression or cooperation at B or C. Both players know the payoffs at the end of each branch. 
In the equilibrium of this game, Lee chooses ________, and then Cody chooses ________.
A. aggression; cooperation B. cooperation; cooperation C. cooperation; aggression D. aggression; aggression
There is no limit for domestic central bank intervention
Indicate whether the statement is true or false
Following mergers that raised the market shares of two airlines to 79 and 82 percent, respectively, of traffic in their hub cities, prices of service rose and the quantities of service fell, even though in most other markets, prices fell and quantities increased. The result suggests that
A. these markets were contestable. B. there was evidence of market power. C. oligopoly firms bought out their competitors. D. the market had no barriers to entry.
Each of the following is a provision of the 1996 welfare reform law except that
A. the federal guarantee of cash assistance for poor children is ended. B. the head of every welfare family would have to work within 2 years or the family would lose benefits. C. after receiving welfare for two months adults must find jobs or perform community service. D. women who have more children while on welfare will have their benefits reduced.