The answer is increas taxes think bout it' if u decrease it would make it worse
Answer:
(A) 22,222.22
(B) 57,142.86
Explanation:
we will divide the deposit by the reserve requirement to know how much will expand the money supply.
4,000/0.18 = 22,222.22
4,000/0.07 = 57,142.86
The reasoning behind this multiplier effect is the following:
you deposit 4,000
the bank leave 18% = 920
And lend the remaninder: 3,080
Then, when this are deposit, again takes the minimun reserve and lend the remainder:
3,080 x 18% = 554.4
3,080 - 554.4 = 2,525.6
This process is repeated giving diminished amount to money available to lend. Thus, finding a limit on the division between fund and reserve requirement.
4,000/0.18 = 22,222.22
a checklist should be based off of past problems.
Hope this helps !
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Answer:
Option C. Leftward by $40 billion at each price level
Explanation:
The shift would be leftward because the decrease in investment results the decrease in the aggregate demand which will decrease the aggregate demand by decrease in investment divided by multiplier 0.5, which gives $40 billion decrease in aggregate demand. So the result would be the leftward shift by $40 billion at each price level.
