Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required reserves, and makes a loan of $800, this set of transactions will:

e. increases the money supply by $800

Explanation:

The scenario described in the question is how money is created in an economy. Banks take deposits and loan them out to entities who would then deposit this loan in another bank (for instance) which would then give it out as loans as well.

The process will theoretically continue till it reaches zero. When the bank in the question made a loan of $800 out of the $1,000 therefore, it was increasing the money supply by $800.

c.

explanation:

regressive tax taxes the poor and less of the wealthy. this the rich get richer and the poor get more poor. this would create a large wealth gap.

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