Econ 202

25 percent

A bank has $8,000 in deposits and $6,000 in loans. It has loaned out all it can given the reserve requirement. It follows that the reserve requirement is

Monetary growth affects nominal but not real variables

According to classical macroeconomic theory, in the long run

The price level would rise by 5 percent and real GDP would be unchanged

According to the assumptions of the quantity theory of money, if the money supply increases 5 percent then

the central bank had credibility and if bonds were usually indexed for inflation

An economist would be more likely to argus for reducing inflation if she thought that

His real salary has fallen and his nominal salary has risen

Assistant manager gets a $100 raise, he figures that with his new monthly salary he cannot buy as many goods and services as he could but last year

Increased from about 25% to 50%

Between 1980 and 1995 government debt as a percentage of GDP

Nominal variables

Economic variables whose values are measured in monetary units are called

a central bank

Economists call an institution designed to oversee the banking system and regulate the quantity of money in the economy

longer the duration of each spell of unemployment and the higher the unemployment rate

Economists would predict that, other things the same, the more generous unemployment compensation a country has

Every six weeks

Federal Open Market Committee meets about

job searching. It is often thought to explain relatively short spells of unemployment

Frictional unemployment results from

Causes firms to change prices more frequently and makes relative prices more variable

Higher inflation

7,400

How many adults were not in Baltivia's labor force in 2009?

1/R

If R represents the reserve ratio for all banks in the economy, then the money multiplier is

would have to increase the money supply. This would move unemployment further from the natural rate

If a central bank were required to target inflation at zero, then when there was an unanticipated increase in aggregate supply the central bank

Lenders and people holding a lot of currency

If people has been expecting prices to rise but in fact prices fell, then who among the following will benefit?

0

If the government imposes a minimum wage of $2, how many workers will be unemployed ?

All of the above are correct

If the relevant money-demand curve is the one labeled MD1 then

$14,000 of new money

If the reserve ratio is 10 percent, $1,400 of additional reserves can create up to

69.7% and 3.6%

In 2005 there were 50.40 million people over age 25. What were the labor-force participation rate and the unemployment rate for this group?

Would reduce the multiplier. If the Fed wanted to offset the effect of this on the size of the money supply, it could have bought bonds.

In anticipation banks raised their reserve ratios to have enough cash on hand to meet depositors demands. These actions by the public

4.5 percent of GDP without raising the debt-to-income ratio

Inflation rate of about 2 percent a year, a real GDP growth rate of about 2.5 percent. Then the government can have a deficit of about

4.5

M=8,000 P=3 Y=12,000 then V=

It is a medium of exchange

Money is the most liquid asset available because

A store of value, but not a unit of account nor medium for exchange

Most financial assets other than money function as

Short, but most unemployment observed at any given time is long term

Most spells of unemployment are

the short run phillips curve shifts left

Other things the same, if the central bank decreases the rate at which it increases the money supply, then in the long run

Gradually decreased

Over the past several decades, the difference between the labor-force participation rates of men and women in the U.S. has

eventually reduces inflation expectations

Proponents of zero inflation argue that a successful program to reduce inflation

firms change prices only once in a while

Relative-price variability is "automatic" when

Raises the discount rate but not if it auctions more credit

Reserves decrease if the Federal Reserve

and the labor-force participation rate both increase

Sirius has just finished high school and started looking for his first job, bus has not yet found one. Other things the same, the unemployment rate

Both the unemployment rate and labor-force participation rate would be higher

Some persons are counted as out of the labor force because they have made no serious or recent effect to look for work. However, some of these individuals may want to work even though they are too discouraged to make a serious effect to look for work. If these individuals were counted as unemployed instead of out of the labor force

money supply to fall. To reduce the impact of this the Fed could buy Treasury bonds

Suppose banks decide to hold more excess reserves relative to deposits. Other things the same, this action will cause the

the inflation rate, but not the natural rate of unemployment

Suppose the Fed decreases the growth rate of the money supply. Which of the following would be lower in the long run?

All of the above

Suppose the united states unexpectedly decided to pay off debt by printing new money. Which of the following would happen?

store of value, unit of account, medium of exchange

The $500 you kept in your piggy bank, the $500 price illustrates money's function, this transaction illustrates money's function as a

Sales but not if it auctions term credit

The Fed decreases reserves if it conducts open market

does not have an inflation target; if it did it would likely be in the range of 2%

The Federal Reserve

Determines nominal variables, but not real variables

The classical dichotomy refers to the idea that the supply of money

all of the above

The classical theory of inflation

22.5%

The money supply is $80,000 and reserves are $18,000. The reserve requirement is

divided by the labor force, all times 100

The unemployment rate is computed as the number of unemployed

m1 increases by $2,500 and M2 stays the same

They withdraw 2,500 from their savings account to purchase $2,500 worth of travelers checks. As a result of these changes

All of the above are correct

Wages are above the level that would prevail, reduces the quantity of labor demanded, allocation of labor resulting from unions

Structural but not frictional unemployment

Wages in excess of their equilibrium level help explain

66.7%

What is the adult labor-force participation rate in Meditor

86.7% was short term, 88.9 was long term

What percentage of the unemployment spells you encountered was short term, and what percentage of the unemployment you encountered in a given week was long term?

sells government bonds, and in so doing decreases the money supply

When conducting an open-market sale, The Fed

It sells Treasury securities, which decreases the money supply

When the Fed conducts open-market sales

Movement to the left along the money demand curve

When the money market is drawn with the value of money on the vertical axis, a decrease in the price level causes a

Demand decreases

When the money market is drawn with the value of money on the vertical axis, as the price level decreases the quantity of money

Wizard of Oz

Which movie is an allegory about late 19th century monetary policy

Through monetary policy is neutral in the long run, it may have effects on real variables in the short term

Which of the following is correct, about monetary policy

The federal reserve has 12 regional banks. The board of Governors has 7 members who serve 14-year terms

Which of the following is correct, about the federal reserve

currency, demand deposits, and other checkable deposits

Which of the following is included in both M1 and M2

$500 in your savings account

Which of the following is not included in M1

Some people are not eligible to hold them

Which of the following is true concerning IRA's 401(k) and 403(b) plans

Cash

Which of the following lists is included in what economists call "money"

both the changes in information technology and unemployment insurance

Which of these changes affect frictional unemployement

Your nominal wage increases. Real wage is increased

Your boss gives you an increase in the number of dollars you earn an hour

Lower than expected transferred wealth from debtors to creditors

between 1880 and 1886, prices that were

the increase the money supply, the Fed could

decrease the reserve requirement

favorable supply shocks that shifted the short-run Phillips curve left

during the mid and last part of the 1990s both inflation and unemployment were low, In general this could have been the result of

$3,250 of new reserves

if the reserve ratio is 4 percent, then $81,250 of new money can be generated by

56.25%

labor-force participation rate of Aridia in 2012

2

m=150 v=4 and y=300 then, p=

The nominal interest rate was 6 percent and the inflation rate -1.5 percent

one year later she sees that the account has 6 percent more dollars and that her money will buy 7.5 percent more goods

frictional unemployment created by sectoral shifts

suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and steakhouses need more. The unemployment created by this change is

increase frictional unemployment

unemployment insurance tends to

the quantity of labor supplied exceeds the quantity of labor demanded

when the wage is above the equilibrium

currency and reserves

which of the following increase when the Fed makes open market purchases