ECON 200 Final Exam Practice Test
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Solutions Already Graded A+ ||
2026-2027 Latest Update!!!
How do reserves and deposits change from the bank's perspective
when $500 is deposited? - ANSWER-Reserves increase by $500 and
deposits (a liability) also increase by $500, with no effect on the
money supply.
How do you calculate excess reserves if a bank has actual reserves of
$9,000 and deposits of $30,000 with a required reserve ratio of 20%? -
ANSWER-Excess reserves are $3,000.
How do you calculate the change in aggregate expenditures based on
the change in G? - ANSWER-Change in G x 1/MPS = -50 x 1/0.85 = -
$333.33
How do you solve algebraically for equilibrium income? - ANSWER-Set
aggregate expenditures equal to income (Y = AE) and solve for Y.
, How does a change in taxes (T) affect Aggregate Expenditures? -
ANSWER-A decrease in taxes increases AE by increasing disposable
income.
How does the money supply influence interest rates? - ANSWER-An
increase in money supply typically lowers interest rates, which can
increase Aggregate Demand.
How much will Y* increase if it rises by $100 billion with a multiplier
of 3? - ANSWER-Y* will increase by $300 billion.
If a commercial bank has deposit liabilities of $100,000, reserves of
$37,000, and a required reserve ratio of 20%, how much can the
banking system increase loans? - ANSWER-The bank can increase
loans by $12,000, leading to a total increase in the banking system of
$60,000.
If the Fed believes real GDP is above potential GDP, what action will
they take? - ANSWER-Raise interest rates to shift the AD curve to the
left.
If the Fed buys $5,000 in bonds, how much will the money supply
increase? - ANSWER-Money supply will increase by $5,000 x 5 =
$25,000.
If the required reserve ratio is 20%, how much will the money supply
increase if the Fed buys $5,000 in bonds? - ANSWER-The eventual
increase in the money supply will be $25,000.
What action can the Fed take to decrease the nation's money supply?
- ANSWER-Increase reserve requirements.
Merged With Correct Complete
Solutions Already Graded A+ ||
2026-2027 Latest Update!!!
How do reserves and deposits change from the bank's perspective
when $500 is deposited? - ANSWER-Reserves increase by $500 and
deposits (a liability) also increase by $500, with no effect on the
money supply.
How do you calculate excess reserves if a bank has actual reserves of
$9,000 and deposits of $30,000 with a required reserve ratio of 20%? -
ANSWER-Excess reserves are $3,000.
How do you calculate the change in aggregate expenditures based on
the change in G? - ANSWER-Change in G x 1/MPS = -50 x 1/0.85 = -
$333.33
How do you solve algebraically for equilibrium income? - ANSWER-Set
aggregate expenditures equal to income (Y = AE) and solve for Y.
, How does a change in taxes (T) affect Aggregate Expenditures? -
ANSWER-A decrease in taxes increases AE by increasing disposable
income.
How does the money supply influence interest rates? - ANSWER-An
increase in money supply typically lowers interest rates, which can
increase Aggregate Demand.
How much will Y* increase if it rises by $100 billion with a multiplier
of 3? - ANSWER-Y* will increase by $300 billion.
If a commercial bank has deposit liabilities of $100,000, reserves of
$37,000, and a required reserve ratio of 20%, how much can the
banking system increase loans? - ANSWER-The bank can increase
loans by $12,000, leading to a total increase in the banking system of
$60,000.
If the Fed believes real GDP is above potential GDP, what action will
they take? - ANSWER-Raise interest rates to shift the AD curve to the
left.
If the Fed buys $5,000 in bonds, how much will the money supply
increase? - ANSWER-Money supply will increase by $5,000 x 5 =
$25,000.
If the required reserve ratio is 20%, how much will the money supply
increase if the Fed buys $5,000 in bonds? - ANSWER-The eventual
increase in the money supply will be $25,000.
What action can the Fed take to decrease the nation's money supply?
- ANSWER-Increase reserve requirements.
