If a bank had the reserve requirement of 10 percent and excess reserves of $2,000, the largest loan it could legally extend would be:
a. $200

The quantity theory of money assumed

A) that an increase in prices causes a proportionate increases in real GDP. B) a fall in the velocity of money causes a proportionate increase in the money supply. C) a rise in money supply causes a proportionate fall in velocity. D) the fraction of income people desire to hold in the form of money is a constant.

Suppose the adult population of a country is 100 million. Of these adults, 70 million are employed and 15 million are unemployed. The labor force of this country is _____

a. 170 million b. 115 million c. 85 million d. 30 million