Most economists agree that a majority of recessions are caused by supply shocks

The market in which banks borrow from other banks for short periods of time is the

a. discount market b. federal funds market c. interbank loan market d. national bank market e. liquidity market

Suppose the banks in the Federal Reserve System have $400 million in transactions accounts and the reserve requirement is 0.10. Ceteris paribus, if the reserve requirement is decreased to 0.05, then excess reserves will increase by:

a. $20 million b. $1 million c. $2 billion d. $40 million