macro midterm
If the reserve ratio is 5%, then $600 of additional reserves can create up to
$12,000 of new money
Suppose that the adult population in the town of Springfield is 225 million. If 40 million are unemployed and 100 million are employed, then the unemployment rate is approximately
29%
If M=3,000, P=2, and Y=6,000, what is velocity?
4
The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of about
60,000 households
Amy is working part time. Tavaris is on temporary lay-off. Who is included in the Bureau of Labor Statistics "employed" category?
Only Amy
Who can vote on Federal Open Market Committee decisions?
all of the members of the Board of Governors and some of the Federal Reserve Bank presidents
Sirius has just finished high school and started looking for his first job, but has not yet found one. Other things the same, the unemployment rate
and the labor-force participation rate both increase
The leverage ratio is calculated as
assets divided by bank capital
The federal funds rate is the interest rate
banks charge each other for short-term loans of reserves
The primary difference between commodity money and fiat money is that
commodity money has an intrinsic value but fiat money does not
Which list ranks assets from most to least liquid?
currency, stocks, fine art
When the money market is drawn with the value of money on the vertical axis, as the price level decreases the quantity of money
demanded decreases
Suppose the money market, drawn with the value of money on the vertical axis, is in equilibrium. If the money supply increases, then at the old value of money there is an
excess supply of money that will result in an increase in spending
Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and steak houses need more workers. The unemployment created by this change is
frictional unemployment created by sectoral shifts
In a fractional-reserve banking system, a decrease in reserve requirements
increases both the money multiplier and the money supply
Which of the following is not a tool of monetary policy
increases the government budget deficit
If when the money supply changes, real output and velocity do not change, then a 2 percent increase in the money supply
increases the price level by 2 percent
When the price level rises, the number of dollars needed to buy a representative basket of goods
increases, and so the value of money falls
When the Fed conducts open-market purchases,
it buys Treasury securities, which increases the money supply
A bank has an 8 percent reserve requirement, $10,000 is deposits, and has loaned out all it can given the reserve requirement
it has $800 in reserves and $9,200 in loans
Which of the following is not a reason economics experience structural unemployment?
job search
Which of the following is the correct formula for calculation the labor force participation rate?
labor force/adult population x 100
You pay for cheese and bread from the deli with currency. Which function of money does this best illustrate?
medium of exchange
When inflation rises, firms make
more frequent price changes. This raises their menu costs.
If the Federal Reserve increases the interest rate on bank deposits at the Fed, banks will want to hold
more reserves, so the money multiplier will fall
The amount of unemployment that an economy normally experiences is called the
natural rate of unemployment
Lucy quit her job because she was unhappy at work. Genevieve was fired because she frequently surfed the internet rather than working on her assigned tasks. Who is eligible for unemployment insurance benefits?
neither Lucy nor Genevieve
The introduction of a union into an industry
raises wages and lowers employment in that industry
Cyclical unemployment is closely associated with
short-term ups and downs of the economy
A decrease in the money supply might indicate that the Fed had
sold bolds in an attempt to increase the federal funds rate
Efficiency wages create a labor
surplus and so increase unemployment
Under the assumptions of the Fisher effect and monetary neutrality, if the money supply growth rate rises, then
the nominal interest rate rises, but the real interest rate does not
The inflation tax refers to
the revenue a government creates by printing money
Wealth is redistributed from debtors to creditors when inflation is
unexpectedly low