If the reserve requirement is 20 percent and a new deposit of $10,000 in cash is made by a customer to their checking account, by how much are excess reserves increased?

A decrease in the interest rate causes

A) movement up the IS curve. B) movement down the LM curve. C) the IS curve to shift to the left. D) the LM curve to shift to the right.

Which of the following statements is correct? I. When economists derive the aggregate demand curve, they are looking at the effect of the price level on one commodity only. II. Any non-price-level change that increases aggregate spending on domestic goods shifts the AD curve to the right.

A) I only B) II only C) Both I and II D) Neither I nor II