The reserve requirement is:
A. the regulation that sets the minimum fraction of deposits banks must hold in reserve.
B. the dollar amount of cash banks must keep on hand and not loan out.
C. currently set at $2 million for most banks.
D. a loose guideline for how much banks must hold in reserves.
A. the regulation that sets the minimum fraction of deposits banks must hold in reserve.
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Which of the following would be considered a factor of production in the provision of bus service?
A. The amount it costs to provide bus service between two locations B. The hourly wage paid to bus drivers C. The revenue from the sale of bus tickets D. Bus drivers
Janie must choose to either mow the lawn or wash clothes. If she mows the lawn, she will earn $30, and if she washes clothes, she will earn $45. She dislikes both tasks equally and they both take the same amount of time. Janie will therefore choose to ________ because it generates a ________ economic surplus.
A. mow the law; smaller B. mow the lawn; bigger C. wash clothes; smaller D. wash clothes; bigger
What is the likely effect in an economy when total spending is too high?
a. inflation b. tax decreases c. unemployment d. efficiency