Author Question: If investment decreases by 20 billion and the MPC = 0.8, the resulting decrease in the consumption ... (Read 17 times)

mia · **on:** Jun 30, 2018

If investment decreases by 20 billion and the MPC = 0.8, the resulting decrease in the consumption component of AD is:
a. 16 billion.
b. 4 billion.
c. 100 billion.
d. 80 billion.

Question 2

If a bank has deposits worth 800,000 . total reserves worth 800,000 . and the reserve ratio of 0.20, what is the value of excess reserves?
a. 620,000
b. 1,000,000
c. 1,160,000
d. 640,000
e. 160,000