A bank has deposits of $100,000, reserves of $20,000, and loans of $80,000. If the desired reserve ratio is 10 percent, then its excess reserves are

Which of the following would likely result if a constitutional amendment requires the U.S. government to balance its budget every year?

a. Fiscal spending would increase largely resulting in a higher government debt b. Automatic stabilizers would cease to work and the severity of economic fluctuations would worsen. c. Interest rates would become highly volatile with the increased use of discretionary monetary policies. d. Unemployment would be below its natural rate and output would be at the potential level.

In the equation of exchange, the letter "V" stands for

A) variance. B) validity. C) volume. D) velocity.