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What is the amount of the required reserve

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1. Assume the United States economy is macroeconomic equilibrium at full employment, when it experiences a technology bust that leads to a decline technology across industries and decreases productivity. Evaluate the effect on the AD curve, AS curve, LRAS curve equilibrium price level and equilibrium output. Explain your answer and in addition provide a graph that reflects your explanation.

2. Starting at macroeconomic equilibrium at full employment, show the effect of completely expected expansionary monetary policy using an aggregate demand-aggregate supply (AD-AS) model and discuss.

3. An economy is operating with an output that is $600 billion dollars above its natural rate of $2400 billion dollars and fiscal policy makers want to close the inflationary gap. The central bank agrees to hold the interest rate constant so there is no crowding out. The marginal propensity to consume is 3/4. In which direction and by how much would the government spending need to change to close the gap? Fully explain your answer and provide a graph that shows the initial situation.

4. The following information is given about the Bank of Brookhaven. The deposits for the bank are $1,000,000. The bank has reserves of $350,000. The reserve ratio is 10%

a. Provide a T account for the bank that shows the deposits, reserves, and loans for the bank.

b. What is the amount of the required reserve?

c. Does the bank have any excess reserves? If yes, how much?

d. What is the maximum amount of money the bank can loan?

e. If the reserve ratio changed to 12.5% would anything change? How

Reference no: EM132586718

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