a.

is also in the labor force.

b.

must have recently looked for work or be on temporary layoff.

c.

must be at least 16 years old.

d.

All of the above are correct.

a.

6.25%

b.

8.3%

c.

9.1%

d.

18.75%

a.

create frictional unemployment, while firms paying wages above equilibrium to reduce worker turnover creates structural unemployment.

b.

create structural unemployment, while firms paying wages above equilibrium to reduce worker turnover creates frictional unemployment.

c.

and firms paying wages above equilibrium to reduce worker turnover both create structural unemployment.

d.

and firms paying wages above equilibrium to reduce worker turnover both create frictional unemployment.

a.

0

b.

4000

c.

5000

d.

8000

a.

increases frictional unemployment but leaves the natural rate of unemployment unchanged.

b.

increases frictional unemployment and increases the natural rate of unemployment.

c.

increases structural unemployment but leaves the natural rate of unemployment unchanged.

d.

increases structural unemployment and increases the natural rate of unemployment.

a.

cyclical unemployment.

b.

frictional unemployment.

c.

seasonal unemployment.

d.

structural unemployment.

a.

the normal rate of unemployment.

b.

deviant unemployment.

c.

cyclical unemployment.

d.

fluctuating unemployment.

a.

Because they have the same term to maturity the interest rates should be the same.

b.

Because of the differences in tax treatment and credit risk, the state bond should have the higher interest rate.

c.

Because of the differences in tax treatment and credit risk, the corporate bond should have the higher interest rate.

d.

It is not possible to say if one bond has a higher interest rate than the other.

a.

a claim to a share of the profits of a firm.

b.

ownership in a firm.

c.

equity finance.

d.

All of the above are correct

a.

The supply of and demand for loanable funds would shift right.

b.

The supply of and demand for loanable funds would shift left.

c.

The supply of loanable funds would shift right and the demand for loanable funds would shift left.

d.

None of the above is correct.

a.

and the equilibrium quantity of loanable funds both would be lower.

b.

and the equilibrium quantity of loanable funds both would be higher.

c.

would be higher and the equilibrium quantity of loanable funds would be lower.

d.

would be lower and the equilibrium quantity of loanable funds would be higher.

a.

makes investment spending fall.

b.

makes investment spending rise.

c.

does not affect investment spending.

d.

may increase, decrease, or not affect investment spending.

a.

a budget deficit makes interest rates rise.

b.

a budget deficit makes interest rates fall.

c.

a budget surplus makes interest rates rise.

d.

a budget surplus makes interest rates fall.

a.

Firms become pessimistic about the future and, as a result, they cut back on their plans to buy new equipment and build new factories.

b.

The government goes from running a budget deficit to running a budget surplus.

c.

Congress passes a reform of the tax laws that encourages greater saving.

d.

Congress passes a reform of the tax laws that encourages greater investment.

a.

the supply of loanable funds does not change; a higher interest rate reduces private saving

b.

the supply of loanable funds does not change; a higher interest rate raises private saving

c.

at any interest rate the supply of loanable funds is less; a higher interest rate reduces private saving

d.

at any interest rate the supply of loanable funds is less; a higher interest rate raises private saving

a.

all wealth.

b.

all assets, including real assets and financial assets.

c.

all financial assets, but not real assets.

d.

those types of wealth that are regularly accepted by sellers in exchange for goods and services.

a.

currency

b.

U.S. government bonds

c.

fine art

d.

All of the above are correct.

a.

a unit of account

b.

a store of value

c.

medium of exchange

d.

None of the above is correct.

a.

traded for another asset determines whether or not that asset is a unit of account.

b.

transported from one place to another determines whether or not that asset could serve as fiat money.

c.

converted into a store of value determines the liquidity of that asset.

d.

converted into the economy’s medium of exchange determines the liquidity of that asset.

a.

a store of value.

b.

a medium of exchange.

c.

a unit of account.

d.

a method of barter.

a.

a $5 bill in your wallet

b.

$100 in your checking account

c.

$500 in your savings account

d.

All of the above are included in M1.

a.

M1 increases by $2,500 and M2 decreases by $2,500.

b.

M1 increases by $2,500 and M2 stays the same.

c.

M1 decreases by $2,500 and M2 stays the same.

d.

M1 decreases by $2,500 and M2 decreases by $2,500.

a.

the Comptroller of the Currency.

b.

the U.S. Treasury.

c.

the Federal Reserve.

d.

the U.S. Bank.

a.

buys government bonds, and in so doing increases the money supply.

b.

buys government bonds, and in so doing decreases the money supply.

c.

sells government bonds, and in so doing increases the money supply.

d.

sells government bonds, and in so doing decreases the money supply.

a.

government regulation requires the bank to use at least 8 percent of its deposits to make loans.

b.

the bank’s ratio of loans to deposits is 8 percent.

c.

the bank keeps 8 percent of its deposits as reserves and loans out the rest.

d.

the bank keeps 8 percent of its assets as reserves and loans out the rest.

a.

increases.

b.

does not change.

c.

decreases.

d.

could do any of the above.

Assets

Liabilities

Reserves              $750

Deposits          $10,000

Loans                  9,250

a.

7.50 percent.

b.

8.12 percent.

c.

92.50 percent.

d.

100 percent.

a.

$866.67.

b.

$1,666.67.

c.

$2,000.00.

d.

an infinite amount.

a.

more than $200.

b.

exactly $200.

c.

less than $200.

d.

None of the above are correct.