1)In the Banks sub-model, banks payments to the private sector include

interest payments on deposits dividends interest payments on loans both A & B both B & C

2)To calculate net lending to the private sector, the Banks sub-model

ignores loan repayments

subtracts lending from repayments subtracts repayments from lending all of the above none of the above

3)The total reserves ratio includes

required reserves ratio excess reserves ratio both of the above neither of the above

4)The required reserves ratio was ________ in 2020.

raised to 20% lowered to 10% raised and lowered all of the above none of the above

5)In the Banks sub-model, the initially assumed value for the RRR is ____.

0 .05 .10 .20

6)In the Banks sub-model, a tax cut causes

borrowing to increase

the money supply to increase bank assets to increase all of the above none of the above

7)In the Banks sub-model, a tax cut has a quicker effect on borrowing

if interest rates are also cut. if interest rates are raised. if interest rates are not changed. all of the above none of the above

8)When the total reserves ratio equals 0.20, a tax cut of $100 billion in the Banks sub-model causes the money supply to ________.

ncrease by $100 billion decrease by $100 billion increase by $500 billion decrease by $500 billion

9)When the total reserves ratio equals 0.10, a tax cut of $100 billion (combined with a lower interest rate) causes the money supply to ________ in the Banks sub- model.

increase by almost $1 trillion decrease by almost $1 trillion increase by more than $1 trillion decrease by more than $1 trillion

10)If you increase the reserves ratios in the Banks sub-model, the effect of a tax cut on borrowing is

stronger. weaker. the same.