Author Question: Assume that there are no excess reserves in the banking system when the reserve requirement is 20. ... (Read 95 times)

jrubin · **on:** Jun 30, 2018

Assume that there are no excess reserves in the banking system when the reserve requirement is 20. The purchase of 10,000 in U.S. government securities by the Fed from Academy National Bank has the potential to ultimately increase the money supply by:
a. 2,000.
b. 8,000.
c. 10,000.
d. 20,000.
e. 50,000.

Question 2

Which of the following is not true about a change in the price level?
a. It will shift the aggregate demand curve.
b. It will shift the aggregate expenditure curve.
c. It will result in a new value of equilibrium real GDP demanded.
d. It will change the real value of dollar-denominated assets.
e. It will shift the consumption function.