If a factor of production has no production cost and has a fixed supply, then payments to that factor constitute what economists call:

The above figure presents the view of the economy according to

A) Keynesian economics. B) classical economics. C) microanalysis. D) Ricardian economics.

The reserve ratio is 20 percent. After the Fed buys $1 million in U.S. government securities from a bond dealer by transmitting the funds to the dealer?s deposit account at Bank A, Bank A lends a construction company an amount equal to its excess reserves. The construction company spends the entire amount on lumber from a lumber yard, which deposits the construction company?s check in its deposit account with Bank A. The maximum loan Bank A can now make is

A) $0. B) $640,000. C) $800,000. D) $1 million.