Assume a simplified banking system subject to a 25 percent ...

[B]

Assume a simplified banking system subject to a 25 percent required reserve ratio. If there is an initial increase in excess reserves of 100,000 . the money supply:
 a. increases 100,000 b. increases 400,000.
  c. increases 125,000 d. decreases 500,000.

Question 2

Economic growth is represented by a rightward shift of the long-run aggregate supply curve (LRAS).
 a. True
  b. False
  Indicate whether the statement is true or false

[bulacsom]

Answer to Question 1

b

Answer to Question 2

True