When does a shortage occur? What will be an ideal ...

[APUS57]

When does a shortage occur?
 
  What will be an ideal response?

Question 2

When the Fed purchases government securities ________ loans end up being made because ________.
 
  A) more; excess reserves in the banking system increase
  B) fewer; excess reserves in the banking system decrease
  C) more; excess reserves in the banking system decrease
  D) fewer; required reserves in the banking system increase but desired reserves decrease
  E) fewer; excess reserves in the banking system increase

[zenzy]

Answer to Question 1

A shortage occurs when the price is below the equilibrium price. When the price is less than the equilibrium price, the quantity demanded is greater than the quantity supplied.

Answer to Question 2

A