PLEASE SHOW ALL CALCULATIONS AND EXPLAIN AND IT SHOULD BE CORRECT SINCE I\'M DOI

Question

PLEASE SHOW ALL CALCULATIONS AND EXPLAIN AND IT SHOULD BE CORRECT SINCE I'M DOING A TEST. THANKS

QUESTION 1

A. Using the table above, if the reserve requirement is 20%, then the total amount the bank could create is

A. $ 40,000

B. $ 60,000

C. $ 100,000

D. $ 340,000

E. $ 180.000

B. If the required reserve ratio is 25%, the money multiplier is

A. 0.04

B. 2

C. 4

D. 5

E. 10

QUESTION 2:

Suppose investors do not expect to make a rate of return on investment equal to the interest they want to pay on the loan for the investment. Which of the following best describes the impact of this belief on demand for loanable funds and interest rate?

Loanable funds/Interest rate

A. Increase/ Increase

B. Increase/ Decrease

C. Increase/ No change

D. Decrease/ Increase

E. Decrease/ Decrease

QUESTION 3

If the money supply increase, then

A. Velocity will decrease

B. Velocity will increase

C. Nominal GDP will decrease

D. Nominal GDP will increase

E. Nominal GDP will not be affected

Explanation / Answer

1A. The correct answer is D.

1B. The correct answer is C.

2. The correct answer is E.

3. The correct answer is D.  

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