Assume that a bank holds legal reserves of 800, the required ...

[sam.t96]

Assume that a bank holds legal reserves of 800, the required reserves are 400 and total deposit is 4,000 . If the government purchases bonds worth 200, excess reserves will increase by _____.
 a. 420
  b. 180
  c. 100
  d. 80
  e. 40

Question 2

An increase in the price of a good could be caused by
 a. An increase in supply.
 b. An increase in demand.
 c. A decrease in supply and an increase in demand.
  d. Either b. or c.

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Answer to Question 1

b

Answer to Question 2

d