Assume that there are no excess reserves in the banking system when the reserve requirement is 20%. The purchase of $10,000 in U.S. government securities by the Fed from Academy National Bank has the potential to ultimately increase the money supply by:
a. $2,000

A fall in the money wage rate shifts

A) both the SAS and LAS curves rightward. B) both the SAS and LAS curves leftward. C) the SAS curve rightward but leaves the LAS curve unchanged. D) the LAS curve rightward but leaves the SAS curve unchanged.

Refer to Figure 9-1. Suppose the government allows imports of leather footwear into the United States. The market price falls to $18. What is the value of consumer surplus?

A) $0 B) $270 C) $305 D) $320