1.Suppose a credit union has checkable deposits of $400,000 and the legal reserve ratio is 10 percent. If the institution has excess reserves of $8,000, then its actual reserves are

Multiple Choice

• $48,000.
• $32,000.
• $8,000.
• $40,000.

2.

\fRefer to the graph. If the initial equilibrium interest rate was 5 percent and the money supply increased by $200 billion, then the new interest rate would be 6 A 5 4 C Interest Rate 3 D 2 -F E $50 100 150 200 250 300 Amount of Money Demanded ($B)