If the potential money multiplier in the U.S. is 4, then a $2,000 increase in demand deposits when banks hold excess reserves will result in which of the following?
a. the money supply will decrease by $8,000
b. the money supply will remain unchanged because the excess reserves will cancel out the potential loans
c. the money supply will increase by $8,000
d. the money supply will increase by more than $8,000
e. the money supply, if it increases at all, will increase by less than $8,000
E
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An increase in demand will cause the equilibrium price and quantity to rise, ceteris paribus
Indicate whether the statement is true or false
If the marginal propensity to save (MPS) is 0.5, the multiplier will be
A. 2. B. 4. C. 2.5. D. 0.5.
Refer to the information provided in Figure 7.8 below to answer the question(s) that follow. 
Figure 7.8Refer to Figure 7.8. The slope of isocost CD is
A. -1. B. -2/3. C. 0. D. indeterminate from this information, as the prices of capital and labor are not given.
Refer to the information provided in Figure 4.3 below to answer the question(s) that follow.
Figure 4.3Refer to Figure 4.3. The government setting the price of pencils at $0.40 would be an example of an effective
A. price ceiling. B. price surplus. C. market equilibrium. D. price floor.