If the required reserve ratio was 25 percent, a bank that received currency deposits of 16,000:
a. could now issue 64,000 of new loans.
b. could now issue 16,000 of new loans.
c. could now issue 12,000 of new loans.
d. could now issue 4,000 of new loans.
Question 2
According to the new classical school, an expected increase in government spending is associated with:
a. a downward movement along the long-run Phillips curve.
b. an upward movement along the short-run Phillips curve.
c. a parallel outward shift of the long-run Phillips curve.
d. an upward movement along the long-run Phillips curve.
e. a downward shift of the short-run Phillips curve.
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