If you deposit 500 cash into your account at a commercial bank. If it faces a 10 percent required reserve ratio, as a result of your deposit, the bank will:
a. have 450 of additional excess reserves.
b. be capable of lending an additional 5,000.
c. be capable of lending an additional 500
d. have 50 of additional excess reserves.
Question 2
The _____ aggregate supply curve assumed by classical economists means that the equilibrium level of _____ is determined only by the aggregate supply curve.
a. vertical; output
b. horizontal; price
c. upward-sloping; price
d. horizontal; output
e. downward-sloping; price
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