Exhibit 15-7 Lower Walloon National Bank
Assets
Liabilities
Reserves$10,000
Checkable deposits$10,000
In Exhibit 15-7, if the required reserve ratio is 20 percent for all banks, and every bank in the banking system loans out all of its excess reserves. Then a $10,000 deposit from Mr. Brown in checkable deposits could create for the entire banking system:

Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream

If some bankers are moved to making ice cream, we get a small increase in the amount of ice cream produced and a large decrease in the amount of banking services provided. If the PPF has banking services on the vertical axis and ice cream on the horizontal axis, the effect of the change reflects A) decreasing opportunity costs. B) a bowed out PPF for banking services and ice cream. C) production efficiency. D) a shift to a flatter PPF.

One method of assessing the degree to which current fiscal policies affect future generations is through a device called

A) inter-temporal fiscal accounting. B) generational accounting. C) long-term debt assessment technique. D) fiscal stabilization tool.