Q1. Assume the supply of money graph. If reserve prerequisite before the shift was 10% as well as the Fed adjusted the reserve constraint to cause the shift, which of the following is a possible new value of the reserve requirement?
Q2. Now consider that government is going to supply a subsidy of $0.60/gallon in order to stimulate this bazaar. In another words, government will provide resources that allow the cost paid by customers to be 60 cents/gallon lower than the cost earned by suppliers. Calculate the new cost earned by sellers, the cost paid by clients, as well as the equilibrium quantity sold in the market.