Explain how each of the following developments would affect the supply of money, the demand for money and the interest rate. illustrate your answers with diagrams. a. the fed's bond traders buy bonds in open-market operations. b. an increase in credit-card availability reduces the amount of cash people want to hold. the federal reserve reduces banks' reserve requirements. d. households decide to hold more money to use for holiday shopping. e. a wave of optimism boosts business investment and expands aggregate demand.

Suppose the number of firms you compete with has recently increased. you estimated that as a result of the increased competition, the demand elasticity has increased from –2 to –3 (i.e., you face more elastic demand). you are currently charging $10 for your product. what is the price that you should charge if demand elasticity is -3?

Alarge university wanted to study the relationship between completing an internship during college and students' future earning potential. prom the same graduating class, they selected a random sample of 80 students who completed an internship and 100 students who did not complete an internship and examined their salaries five years after graduation. they found that there was a statistically higher mean salary for the internship group than for the noninternship group. which of the following interpretations is the most appropriate? a. there could be a confounding variable, such as student major, that explains the difference in mean salary between the internship and no internship groups.b. we cannot infer anything from these data since the distribution of salaries is likely right skewed.c. you cannot draw any valid conclusions because the sample sizes are different.d. more students should complete internships because having an internship produces a higher salary.

Abank has $132,000 in excess reserves and the required reserve ratio is 11 percent. this means the bank could have in checkable deposit liabilities and in (total) reserves.