Please answer all the questions below.

Question 1 (1 point) Demand deposits are balances in bank accounts that depositors can access by writing checks. Question 2 (1 point) The money multiplier equals [1/(1-LRR)], where LRR represents the legal reserve requirement Question 3 (1 point) The loans that commercial banks make to households and firms are considered to be an liability on their balance sheets. Question 4 (1 point) If a person deposits $20,000 in her checking account and the legal reserve requirement is 20%, the commercial bank must keep $4000 as required reserves. Question 5 (1 point) A commercial bank uses its required reserves to create money (M 1) Question 6 (1 point) The money demand curve is upward sloping Question 7 (1 point) The money supply curve is vertical Question 8 (1 point) The public holds some of its wealth as money (M 1) to purchase goods (transaction motive) and for emergencies (precautionary motive) Question 9 (1 point) As interest rates increase, the quantity demanded of money (M1) increases Question 10 (1 point) An increase in the money supply (M 1) results in a lower equilibrium interest rate