Refer to Table 25-1. Suppose a transaction changes a bank's ...

[geodog55]

Refer to Table 25-1. Suppose a transaction changes a bank's balance sheet as indicated in the T-account, and the required reserve ratio is 10 percent. As a result of the transaction, the bank has excess reserves of
 
  A) 0. B) 400. C) 3,600. D) 4,000.
 
  Table 25-2
 
  Assets Liabilities
  Reserves +8,000 Deposits + 8,000

Question 2

Explain how each of the following events would affect the short-run aggregate supply curve.
 
  a. A decrease in the price level
  b. A decrease in what the price level is expected to be in the future
  c. A price level that is currently lower than expected
  d. An unexpected decrease in the price of an important raw material
  e. A decrease in the labor force

[sierrahalpin]

Answer to Question 1

C

Answer to Question 2

a. A lower price level would cause a movement down along the short-run aggregate supply curve.
b. A decrease in what the price level is expected to be in the future would cause the short-run aggregate supply curve to shift to the right.
c. A price level currently lower than expected would lead firms to decrease prices, causing the short-run aggregate supply curve to shift to the right.
d. An unexpected decrease in the price of an important raw material would cause the short-run aggregate supply curve to shift to the right.
e. A decrease in the labor force would cause the short-run aggregate supply curve to shift to the left.

[geodog55]

TYSM

[mjenn52]

Excellent