1)Difference-in-Difference: Suppose that Vermont has passed a law requiring employers to provide 6 months of paid maternity leave

1)Difference-in-Difference: Suppose that Vermont has passed a law requiring employers to provide 6 months of paid maternity leave. You are concerned that women's wages will drop in order to pay for this new benefit. You find a data set that samples men and women in Vermont and in New Hampshire and has information on wages: New Hampshire Vermont Before After Before After Women $9 $12 $8 $10 Men $12 $14 $10 $12 Use difference-in-difference estimator to determine whether the evidence is in favor of your concern.

2)The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 20%. Gilberto, a client of First Main Street Bank, deposits $1,500,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited (Dollars) 1,500,000 Change in Excess Reserves (Dollars) Change in Required Reserves (Dollars) Now, suppose First Main Street Bank loans out all of its new excess reserves to Dina, who immediately uses the funds to write a check to Charles. Charles deposits the funds immediately into his checking account at Second Republic Bank. Then Second Republic Bank lends out all of its new excess reserves to Lorenzo, who writes a check to Juanita, who deposits the money into her account at Third Fidelity Bank. Third Fidelity lends out all of its new excess reserves to Neha in tum. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Deposits (Dollars) Increase in Required Reserves (Dollars) Increase in Loans (Dollars) First Main Street Bank Second Republic Bank Third Fidelity Bank Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $1,500,000 injection into the money supply results in an overall increase of in demand deposits Grade It Now Save & Continue Continue without saving