Homework: Macroeconomics
Part 1
a. Why is the money multiplier in the United States smaller than the inverse of the required reserve ratio? Provide one reason.
b. Explain why depositing cash into a checking account does not change the money supply. Provide one supporting fact.
c. Explain why the money supply does not change when one individual writes a check to another. Provide one supporting fact.
Part 2
a. Describe one reason why the flexibility of wages and prices tend to favor the Keynesian economic view in the short run and one reason why the flexibility of wages and prices tend to favor the classical economic view in the long run.
b. Refer the figure below and explain what happens in each graph (A, B, and C) when an economy is moving from a recession (point a) back to full employment.
Format your homework according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.