7. suppose the payroll tax reduction for middle-income households has been extended in the amount of $200 billion for the remainder of 2018. assuming the mpc for that income group of households is 0.8 and also assuming that other things stay the same, the increase in gdp under this proposed extension of tax break is expected to increase by (δy)

Select the correct answer. after the 2008 recession, the amount of reserves in the us banking system increased. because of federal reserve actions, required reserves increased from $44 billion to $60 billion. however, banks started holding more reserves than required. by january 2009, banks were holding $900 billion in excess reserves. the federal reserve started paying interest on the excess reserves that the banks held. what possible impact will these unused reserves have on the economy? a. the interest rate on loans will fall. b. people will demand more foreign goods. c. people will start borrowing more money. d. the economy will face inflation. e. foreign investments will increase.