Banks try to keep their level of excess reserves low because
A. the Fed charges a penalty for holdings of excess reserves.
B. they are concerned that the money multiplier will become too large.
C. they wish to maximize profits.
D. bank regulators levy fines on the amount of excess reserves.
Answer: C
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Use the following consumption schedule to answer the next question. 
At income level 3, the amount of consumption is represented by the line segment
A. GH. B. FD. C. FG. D. FH.
The World Bank's main concern about the East Asian development model is that
a. it hasn't really worked b. it has relied too much on exports c. it hasn't had the support of labor unions d. it isn't easily replicated where government institutions are weak e. all of the above
The central bank of the United States is the:
a. Federal Reserve Banking System. b. First National Bank. c. Comptroller's Bank. d. United States National Bank. e. U.S. Treasury Bank.
Answer the following questions:
a. If aggregate expenditures falls by $5 million, and the MPC is 0.80, explain the process that will drive the economy to a new equilibrium level. b. What will be the final result of this initial change?