Suppose a bank has 8 million in deposits and a reserve ratio of ...

[WWatsford]

Suppose a bank has 8 million in deposits and a reserve ratio of 20 percent. Its required reserves are
 
  A) 40,000. B) 400,000. C) 1,600,000. D) 16,000,000.

Question 2

Suppose the overall MPC is 0.9. If a 2 billion increase in imports to the United States will lead to a 10 billion decrease in GDP, the value of the marginal propensity to import must be
 
  A) 0.1. B) 0.2. C) 0.5. D) 0.8.

[jasonq]

Answer to Question 1

C

Answer to Question 2

A