Which of the following is true? a. Actual reserves equal ...

[lb_gilbert]

Which of the following is true?
 a. Actual reserves equal required reserves minus excess reserves.
 b. The predominant liability of virtually all banks is loans.
 c. The lower the required reserve ratio, the larger the money multiplier.
 d. If some banks choose not to lend all of their excess reserves, the total amount of money created by an initial cash deposit will be larger.

Question 2

The monetarist assumption that monetary policy cannot change long-run equilibrium income is based on the idea that:
 a. the long-run aggregate supply curve is horizontal.
  b. the long-run Phillips curve is vertical.
  c. the price level in the long run is fixed.
  d. the aggregate demand curve cannot shift.
  e. the long-run Phillips curve is upward-sloping.

[jjorrostieta]

Answer to Question 1

c

Answer to Question 2

b