D Question 69 1 pts Geraldine Mason is president of the newly chartered national bank, the Public eBank. She has been presented with several interesting investment opportunities during the past week, but a review of the balance sheets indicates that reserves are not sufficient to allow the it to make the loans. The promise of profits is very tempting even though some risk is involved. Based on current interest rates, she calculates she will need collateral valued at about $2 million for the size of loan she wants. The net worth of Public eBank currently stands at $1 million. She applies for a loan with the Fed, but it is denied. Which of the following is the MOST LIKELY reason? R O The Fed issues loans to help banks through hard times, not to encourage profits. O The net worth of the Public eBank is too small O The Fed only makes loans to member banks O The proposed investments presented too much risk. Question 70 1 pts Suppose that President Biden faces an economy plagued by stagflation. Output is predicted to drop steadily over the next two quarters. Unemployment is at record levels. If there is a deficit, and the president, under these circumstances, endeavors to balance the budget, which of the following will MOST LIKELY result? O Inflation will continue, but unemployment will drop. O Inflation may be relieved somewhat, but unemployment will be seriously aggravated. O The predicted decline in output will not occur, though there will be no immediate effects on inflation or unemployment O Inflation will be seriously aggravated through increased output, but unemployment will rise.