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