1. If the Federal Reserve reduced its reserve requirement from 6.5 percent to 5 percent. This policy would most likely:

A. decrease both the money multiplier and the money supply

B. decrease the money multiplier but increase the money supply

C. increase both the money multiplier and the money supply

D. increase the money multiplier but decrease the money supply

2. Real gross domestic product is best defined as

A. the market value of all final goods and services produced in an economy, stated in the prices of a given year

B. the market value of goods and services produced in an economy, stated in current-year prices

C. all goods and services produced in an economy, stated in the prices of a given year and multiplied by quantity

D. the market value of intermediate goods and services produced in an economy, including exports