Economics Test 2

When the Fed wants to change the money supply, it most frequently

When the Fed conducts open market operations, it

When the Fed conducts open market sales,

When the Fed conducts open market purchases

The Fed can increase the money supply by conducting open market

The Fed can influence unemployment

On a banks T account

If you deposit $100 into a demand deposit at a bank, this action by itself

When a bank loans out $1000 the money supply

Under a fractional reserve banking system, banks

If you deposited $3000 into first hawkeye bank, the

In 1991 the federal reserve lowered the reserve requirement ratio from 12 percent to 10 percent

If the bank uses $100 of reserves to make a new loan when the reserve ratio is 20 percent

If the reserve ratio is 10 percent, the money multiplier is

If the reserve is 20 percent, the money multiplier is

If the reserve ratio increased from 10 percent to 20 percent, the money multiplier would

If the reserve ratio is 10 percent, $1,000 of excess reserves can make

If the reserve ratio is 15 percent, an additional $1,000 of reserves will increase the money supply by

In Wellville, the money supply is $80,000 and reserves are $18,000. Assuming that people hold only deposits and no currency, and that banks hold only required reserves, the required reserve ratio is

If the reserve ratio is 100 percent, depositing $500 of paper money in a bank will eventually increase the money supply by

Which list contains only actions that increase the money supply

If the Fed wanted to increase the money supply, it would make open market

Which of the following is not a tool of monetary policy?

The labor force participation rate is defined as

Matt loses his job and decides to sit around at home for a few months, the unemployment rate

Anna has just finished school and started looking for a job, but has not yet found one. As a result the unemployment rate

Tara has just finished school, but she is going to roam around the country awhile before she starts looking for work. The unemployment rate

Between 2001 and 2002, the country of Aquilonia reported an increase in the number of people who were employed. It also reported an increase in the unemployment rate.

President Bigego is running for reelection against senator pander. Bigego proclaims that more people are working now than when he took office. Pander says that the unemployment rate is higher now than when Bigego took office, you conclude

Which of the following are correct?

A rough estimate of the natural rate of unemployment

Since World War II, the labor force participation rate

If an unemployed person quits looking for work, the unemployment rate

Some people who are employed or who are not making serious effort to find a job will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force

Suppose that some people report themselves as unemployed when, in fact, they are working in the underground economy. If these persons were counted as employed

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

Discouraged workers

Consider two people who are currently out of work. Deb is not currently searching for work, she has done so at some point in the recent past. Ted is not looking for work, because he doesnt think there are jobs that he would qualify for available.

Consider two people who are currently out of work. Tim is not looking for work because there have been many job cuts where he lives and he deoesnt think it is likely that he will find work. Bev is not currently looking for work, but she would like a job.

Marginally attached workers are

What is the present value of a payment of $100 to be made one year from today if the interest rate is 5%?

The present value of a payment to be made in the future is lower at

You are expecting to receive $650 at some point in the future. Which of the following would decrease the present value of this future payment?

You are expecting to receive $750 at some time in the future. Which of the following would increase the present value of the future payment.

On which bond is default most likely

Assuming that the bonds below have the same term and principal and that the state or local government which issues the municipal bond has a good credit rating, which list has bonds ordered from the one that pays the most interest to the one that pays the least interest?

Other things the same, as the maturity of a bond becomes longer, the bond will pay

Municipal bonds pay a

Which bond would you expect to pay the highest interest rate?

Jerry has the choice of two bonds, one that pays 3 percent interest and one that pays 6 percent interest. Which of the following is most likely?

Lacey, a financial advisor has told her clients the following things. Which of her statements is incorrect?

The sale of stocks