Mr. Garrison has recently obtained a bank card from South Park National Bank. Excited about the concept of using a little plastic card to get money from a machine, he quickly runs down to the nearest ATM and withdraws $500. This action has
A) reduced the bank's required reserves by $25 assuming the reserve ratio is 5 percent.
B) reduced the money supply by $500.
C) increased the money supply by $500.
D) not changed the money supply.
A
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
How does a decrease in government spending affect the aggregate expenditure line?
A) It shifts the aggregate expenditure line upward. B) It shifts the aggregate expenditure line downward. C) It increases the slope of the aggregate expenditure line. D) It decreases the slope of the aggregate expenditure line.
Classical growth theory states that
A) growth is maximized when everyone is fully employed. B) growth is followed by increases in the population, eventually leaving real GDP per person unchanged. C) growth in real GDP per person is difficult in the beginning but easier in the later stages. D) advances in technology will always insure a permanent increase in real GDP per person.
The CPI in the base year is always equal to 100
Indicate whether the statement is true or false