Question 1 Suppose that Econ Bank has excess reserves of $10,000 and checkable deposits of $150,000. If the reserve ratio is 25 percent, what is the size of the bank's actual reserves? mestion 2 Econ Banhhas reserves of $40,000 and checkable deposits of $100,000. The reserve ratio is 25 percent. A customer deposits $10,000 in currency into Econ Bank and that currency is added to reserves. What level of excess reserves does the bank now have? Question 3 An increase in spending of $50 billion increases real GDP from $600 billion to $800 billion in Economics Land. The marginal propensity to consume and the multiplier must be? (M show your work) meson 4 See the information from Economics Land below. What is the equilibrium interest rate in Economics Land? What is the level of investment at the equilibrium interest rate? Is there either a recessionary output gap (negative GDP gap) or an inationary output gap (positive GDP gap) at the equilibrium interest rate and, if either, what is the amount? Given money demand, by how much would the Economics Land central bank need to change the money supply to close the output gap? What is the expenditure multiplier in Economics Land? $500 $800 2% $50 $350 $390 500 7'00 3 40 350 310 500 600 4 30 350 350 500 500 5 20 350 330 500 400 6 | 0 350 3 IO