In Macroland, currency held by the public is 4,000 econs, bank reserves are 300 econs, and the required reserve/deposit ratio is 10.0 percent. If the Central Bank raises the required reserve/deposit ratio making the new desired ratio equal to 15 econs, then the money supply in Macroland will to econs, assuming that the public does not wish to change the amount of currency it holds. Multiple Choice O increase to 6,000 econs O decrease to 7,000 econs O increase to 7,000 econs O decrease to 6,000 econsMultiple Choice O a recessionary; raise an expansionary; reduce no output; not change 000 an expansionary; raise Based on the diagram, if potential output equals 8,000 and the real interest rate is 2 percent, then there is gap and the Fed must the real interest rate so that output will equal potential output. PAE Y = PAE Expenditure Line (r = 2%) Expenditure Line (r =4%) Expenditure Line (r = 6%) 4.000 8,000 10,000 Output YBased on the diagram, if potential output equals 8,000 and the real interest rate is 2 percent, then there is gap and the Fed must the real interest rate so that output will equal potential output. PAE Y = PAE Expenditure Line (r = 2%) Expenditure Line (r = 4%) Expenditure Line (r = 6%) 4,000 8,000 10,000 Output YMultiple Choice O a recessionary; raise O an expansionary; reduce O no output; not change O an expansionary; raiseIf planned aggregate spending in an economy can be written as PAE = 10,000 + 0.75 Y - 10,000r, and potential output equals 36,200, what real interest rate must the Federal Reserve set to bring the economy to full employment? Multiple Choice O 8.5 percent O 7.5 percent O 9.5 percent O 10 percentIf the Fed's policy reaction function equals r= 0.02 + II where ris the real interest rate and His the inflation rate, when the inflation rate is at the current target of 2 percent, then the real interest rate will be set at Multiple Choice O 2.02 percent. 6 percent. 4 percent. O O Given the information about the economy above, which expression gives induced expenditures? Multiple Choice O [910 700r] [790 700r] 0.2 Y O O 0.8Y O