Use the following example to answer the next five questions.Imagine that Stella deposits $25,000 in currency (which she had been storing in her closet) into her checking account at the bank. Assume that this institution and others like it have a required reserve ratio of 25%.As a result of this deposit, by how much will the bank’s required reserves increase?

Expansionary monetary policy causes ________ the aggregate demand curve.

For something to be considered money, it must

Theoretically, how will an increase in the discount rate affect the money supply?

The portion of additional income that is spent on consumption is called the

Countercyclical fiscal policy

In most nations, one or more governing bodies must approve government spending or new tax policies. This process causes a(n) ________ lag between setting fiscal policy and seeing its effects.

If the marginal propensity to consume is equal to 0.4, the spending multiplier is equal to ________.

Contractionary monetary policy occurs when ________ in an effort to control an economy that is expanding too quickly.

Theoretically, how will an increase in the required reserve ratio affect the size of the money supply?