1.The most likely effect of an increase in the supply of loanable funds is which of the following?

I. Increase Interest Rates.

II. Decrease Interest Rates.

III. Increase Investment.

IV. Decrease Investment.

a. I only

b. II only

c. III only

d. I and IV only.

e. II and III only.

2.Which of the following combinations of monetary and fiscal policy would cause the greatest decrease in aggregate demand?

a. Discount rate decreases, gov spending increases, and open market operations: buy bonds

b. Discount rate decreases, gov spending decreases, and open market operations: buy bonds

c. Discount rate increases, gov spending decreases, and open market operations: sell bonds

d. Discount rate decreases, gov spending increases, and open market operations: sell bonds

e. Discount rate increases, gov spending decreases, and open market operations: buy bonds

3.If on receiving a checking deposit of $300 a bank's excess reserves increased by $255, the required reserve ratio must be

a. 5%

b. 15%

c. 25%

d. 35%

e. 45%.