Which list contains only actions that increase the money supply?

a. making open-market purchases; raising the reserve requirement ratio

b. making open-market purchases; lowering the reserve requirement ratio

c. making open-market sales; raising the reserve requirement ratio

d. making open-market sales; lowering the reserve requirement ratio

35. Sharisse brags to her mother that her starting salary as a management trainee is $36,000, much higher than her mother's starting salary of $21,000 as a management trainee several years ago. If the CPI the year Sharisse begins work is 181.2 and the CPI the year her mother started work was 109.1, Sharisse is

a. wrong. Adjusting for price changes, her salary is less than her mother's salary.

b. wrong. Adjusting for quantity changes, her salary is less than her mother's salary.

c. correct. Adjusting for price changes, her salary is more than her mother's salary.

d. correct. Adjusting for quantity changes, her salary is more than her mother's salary.

e. maybe wrong and maybe right. Adjusting for quantity changes, her salary is less than her mother's salary but with the information given we are unable to further adjust for price changes.

Suppose a bank uses $200 of its $500 excess reserves to make a new loan when the reserve ratio is 20 percent. How does this action by itself initially change the money supply?

a. The money supply increases by $40.

b. The money supply decreases by $40.

c. The money supply increases by $200.

d. The money supply decreases by $200.

Suppose an economy produces only strawberries and ice cream. Last year, 50 units of strawberries are sold at $2 per unit, and 100 units of ice cream are sold at $4 per unit. If the price of strawberries was $1 per unit and the price of ice cream was $2 per unit in the base year, what can we conclude?

a. Nominal GDP is $500, real GDP is $250, and the GDP deflator is 50.

b. Nominal GDP is $350, real GDP is $500, and the GDP deflator is 50.

c. Nominal GDP is $350, real GDP is $500, and the GDP deflator is 200.

d. Nominal GDP is $500, real GDP is $250, and the GDP deflator is 200.