The following figures are for the banking system. Deposits at the central bank = 400 U.S. Government Securities = 600 Transactions Deposits = 1,700 Loans = 800 Stockholder's Equity = 70 Other Assets = 450 Other Liabilities = 380 Borrowing from the Federal Reserve = 250 Cash in the Vault = 150 The reserve ratio on transactions deposits = 10% Currency in circulation = 10 The monetary base equals:

A sudden massive reduction in the availability of chocolate will likely cause the price of chocolate to ________, which will ________ the quantity of chocolate demanded by consumers

A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease

A federal policy that leads to an increase in aggregate supply is likely to result in: a. lower levels of employment

b. an increase in aggregate demand. c. a higher price level. d. lower levels of real GDP. e. an economic expansion.