Q15. If one city has a higher CPI than another city, the city with the higher CPI must have a higher cost of living.

If banks had $10 million in legal reserves, $105 million in checkable deposits, and a 10 percent reserve requirement, they would have to reduce their checkable deposits or increase their reserves.     a. true     b. false Q17. Nominal wages can be converted into real wages by     a. multiplying the nominal wages by the CPI     b. adding the CPI to the nominal wages     c. subtracting the CPI from the nominal wages     d. dividing the nominal wages by the CPI

Q20. According to the equation of exchange, if total output is 2,000 units, the velocity of money is 5, and the money supply is $1,000, the average price per transaction will be     a. $0.50     b. $2.50     c. $5.00     d. $7.50

Q37. Which of the following Fed actions would increase the level of total bank reserves?     a. buying securities from individuals or businesses     b. selling securities to commercial banks     c. reducing reserve requirements     d. raising the discount rate

Q42. According to the Keynesian analysis, equilibrium occurs at the point where total aggregate expenditure equals total output.     a. true     b. false