Suppose that a bank's actual reserves are $5 million, its checkable deposits are $5 million, and its excess reserves are $3 million. The reserve requirement must be:

In which case would you be most likely to expect inflation to occur?

A) The government runs a sustained government deficit by lowering taxes. B) The government runs a sustained government deficit by increasing purchases. C) The government runs a sustained primary deficit by increasing purchases. D) The government funds its sustained deficit by increasing the money supply.

The amount of investment demand at each interest rate falls. If the Fed holds to an unchanged interest rate target, the change in GDP is __________ if it had held to an unchanged money supply target

A) greater than B) less than C) the same as