If each bank in the United States had to keep 100 percent of ...

[james0929]

If each bank in the United States had to keep 100 percent of checkable deposits as reserves, each 1 the Fed injected into new reserves could increase the money supply by:
 a. 1.
 b. 2.
 c. 100.
 d. 5.
 e. a penny.

Question 2

If households save 30 billion more at each level of income and the marginal propensity to consume (MPC) is 0.9, the aggregate expenditure line will _____.
 a. intersect the 45-degree line at a real GDP of 30 billion
 b. shift upward by 30 billion
 c. shift downward by 30 billion
 d. shift upward by 300 billion because of the multiplier effect
  e. shift downward by 300 billion because of the multiplier effect

[dellikani2015]

Answer to Question 1

a

Answer to Question 2

c