Reference no: EM132951541

Problem 1: Monetary policy involves changing:

Select one:

a. banking laws to influence economic activity.
b. employment laws to influence economic activity.
c. the money supply to influence economic activity.
d. tax and expenditures laws to influence economic activity.

Problem 2: In the equation of exchange, MV and PQ can be interpreted as, respectively:

Select one:

a. current GDP and constant GDP.
b. constant GDP and current GDP.
c. total spending and the dollar value of output in the economy.
d. the dollar value of output in the economy and total spending.

Problem 3: If a commercial bank has $160 million in deposits, $40 million in actual reserves, and a reserve requirement of 20 percent, that bank can make new loans of:

Select one:

a. $8 million.
b. $32 million.
c. $128 million.
d. $160 million.