Macro Chapters 10, 11
The labor force is
B. 98.0 million.
Which if the following statements about a bank's balance sheet is true?
B. Assets minus liabilities equals owner's equity or capital.
Commodity money
B. Has intrinsic value.
A minimum-wage law tends to
B. create more unemployment in low-skill job markets than in high-skill job markets.
Unions might increase efficiency in the case where they
B. offset the market power of a larger firm in a "company town."
An example of fiat money is
B. paper dollars.
The discount rate is
B. the interest rate the Fed charges on loans to banks.
If unemployment insurance were so generous that it paid laid-off workers 95 percent of their regular salary,
B. the official unemployment rate would probably overstate true unemployment.
If the reserve ratio is 25 percent, the value of the money multiplier is
B. 4.
Which of the following statements is true?
A. Prime-age men and women tend to have similar unemployment rates.
The M1 money supply is composed of
A. currency, demand deposits, traveler's checks, and other checkable accounts.
Sectoral shifts tend to raise which type of unemployment?
A. frictional unemployment
Unions tend to increase the disparity in pay between insiders and outsiders by
A. increasing the wage in the unionized sector, which may create and increase in the supply of workers in the nonunionized sector.
Which of the following policy actions by the Fed is likely to increase the money supply?
A. reducing reserve requirements
Which one of the following types of unemployment results from the wage being held above the competitive equilibrium wage?
A. structural unemployment
If banks increase their holdings of excess reserves,
A. the money multiplier and the money supply decrease.
Suppose all banks maintain a 100 percent reserve ratio. If an individual deposits $1,000 of currency in a bank,
A. the money supply is unaffected.
Suppose the Fed purchases a $1,000 government bond from you. If you deposit the entire $1,000 in your bank, what is the total potential change in the money supply as a result of the Fed's action if the reserve requirements are 20 percent?
C. $5,000
The unemployment rate is
C. 5.8 percent.
Which if the following statements is true?
C. When the Fed sells government bonds, the money supply decreases.
Required reserves of banks are a fixed percentage of their
C. deposits.
Which if the following is not a characteristic of minimum-wage workers? They tend to be
C. full time.
According to the Bureau of Labor Statistics, a husband who chooses to stay home and take care of the household is
C. not in the labor force.
An accountant with a CPA designation who has been unable to find work for so long that she has stopped looking for work is considered to be
C. not in the labor force.
Which of the following is not a function of money?
C. protection against inflation
A decrease in the reserve requirement causes
C. the money multiplier to rise.
If, for any reason, the wage is held above the competitive equilibrium wage,
C. the quantity of labor supplied will exceed the quantity of labor demanded, and there will be unemployment.
Some frictional unemployment is inevitable because
C. there are changes in the demand for labor among different firms.
Suppose Joe changes his $1,000 demand deposit from Bank A to Bank B. If the reserve requirement is 10 percent, what is the potential change in demand deposits as a result of Joe's action?
D. $0
The labor-force participation rate is
D. 70.2 percent
Which of the following statements about efficiency wage theory is true?
D. Paying above the competitive equilibrium wage may improve worker health, lower worker turnover, improve worker quality, and increase worker effort.
Which of the following policy combinations would consistently work to increase the money supply?
D. buy government bonds, decrease reserve requirements, decrease the discount rate
Which if the following types of unemployment will exist even if the wage is at the competitive equilibrium?
D. frictional unemployment
The Fed's tools of monetary control are
D. open-market operations, lending to banks, reserve requirements, and paying interest on reserves.
Which of the filling government policies would fail to lower the unemployment rate?
D. raise the minimum wage
The Board if Governors of the Federal Reserve System consists of
D. seven members appointed by the president.
To insulate the Federal Reserve from political pressure,
D. the Board of Govenors are appointed to fourteen-year terms.
The amount of unemployment that the economy normally experienced is known as
D. the batural rate if unemployment.
If the Fed engages in an open-market purchase, and at the same time, it raises reserve requirements,
D. we cannot be certain what will happen to the money supply.
Which if the following is an example of a reason why firms might pay efficiency wages?
E. All of the above are true.