What were the beneficial aggregate supply shocks that led to a favorable (leftward) shift in the Phillips Curve from around 1990 to the present day? Which kind of monetary policy would you expect in response to high inflation: expansionary or contractionary? Why? A bank has deposits of $600 billion (all numbers in billions). It holds reserves of $55. It has purchased government bonds worth $100. It has made loans of $870. Calculate the total assets, total liabilities, equity (capital) and reserve ratio and for the bank. Explain what will happen to the money multiplier process if there is a decrease in the reserve requirement for banks. List three types of expansionary fiscal policy. That is, ways that the government's power to tax and spend can be used to stimulate the economy. 4 Based on a factor that affects consumption spending, describe a scenario in which that factor contributes to a recession