To achieve a 500 billion decrease in AD, if the MPC is 0.8, what ...

[Jramos095]

To achieve a 500 billion decrease in AD, if the MPC is 0.8, what decrease in government purchases would be called for?
 a. 100 billion
  b. 400 billion
  c. 500 billion
  d. 625 billion

Question 2

Assume that the reserve requirement is 25 percent and that the amount of checkable deposits in Federal Bank is 200 . If the bank has loaned out 120, then the bank's excess reserves must equal:
 a. 0.
  b. 25.
  c. 30.
  d. 80.
  e. 225.

[cegalasso]

Answer to Question 1

a

Answer to Question 2

c

[Jramos095]

TYSM

[mochi09]

Gracias!