Suppose that the reserve requirement is 12.5%, and that depository institutions are holding excess reserves. An increase in the monetary base of $20 billion will ____ the money supply by ____.

Which of the following functions of money allows for goods and services to have a single money price?

True or False: According to the Money Multiplier Effect, a decrease in the size of the monetary base leads to a smaller reduction in the money supply. 

Mexico is a close trading partner of the United States, and Mexican Real GDP falls. In response, the ____ U.S. Dollars shifts ____, and the U.S. Dollar ____.

If the tax multiplier equals​ -1.6, real GDP is​ $13.4 trillion, and potential real GDP is​ $13 trillion, then taxes would need to be cut by​ ____ to restore the economy to potential real GDP.

When the Federal Reserve raises the reserve requirement, the money supply ____, and the interest rate ____ in response.

Suppose that the tax multiplier is -1.5. If there is a recessionary gap of $300 billion, the government could close it by ____ taxes by ____.

Hong Kong pegs its currency to the U.S. Dollar. When the demand for Hong Kong’s exports rises, its currency will appreciate. The Hong Kong Monetary Authority (Hong Kong’s central bank) must respond by ____ Hong Kong Dollars and ____ U.S. Dollars. 

When depository institutions hold excess reserves, the money multiplier is ____, and open-market operations have a ____ effect on the money supply and Real GDP.

Hong Kong pegs its currency to the U.S. Dollar. When the demand for Hong Kong’s exports falls, its currency will depreciate. The Hong Kong Monetary Authority (Hong Kong’s central bank) must respond by ____ Hong Kong Dollars and ____ U.S. Dollars.