Answered: 15. All else equal, a decrease in…

15. All else equal, a decrease in reserve requirements will cause a.state and local government expenditures to fall. b.inflation

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 12PA

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Question

15. All else equal, a decrease in reserve requirements will cause

a.state and local government expenditures to fall.
b.inflation expectations to fall.
c.an increase in the Fed Funds rate.
d.excess reserves to increase.
e.All of the above will occur.

16. An increase in depository institutions' reserves will cause
a.the Fed Funds rate to rise.
b.planned inventory investment to fall.
c.depository institutions to lend more freely.
d.foreign investors to buy more T-Bills.
e.None of the above.

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