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The type of unemployment that occurs because of a recession is called:
a. frictional unemployment.
b. seasonal unemployment.
c. natural unemployment.
d. cyclical unemployment.
The required reserve ratio in Exhibit 15-4 is:
a. 5 percent.
b. 10 percent.
c. 15 percent.
d. 20 percent.
Which of the following economies is an example of a mixed system?
a. The United States.
b. The United Kingdom.
c. Sweden.
d. All of these.
The formula to compute the spending multiplier is:
a. 1 / (MPC + MPS).
b. 1 / (1 - MPC).
c. 1 / (1 - MPS).
d. 1 / (C + I).
Which of the following is most important if the living standards of people residing in a
country are going to improve?
a. growth of population
b. growth of per capita GDP
c. growth of the money supply
d. growth of government expenditures as a share of GDP
In a simplified banking system subject to a 25 percent required reserve ratio, a $1,000
open-market purchase by the Fed would cause the money supply to:
a. increase by $1,000.
b. decrease by $1,000.
c. decrease by $4,000.
d. increase by $4,000.
Demand-pull inflation is caused by:
a. an increase in aggregate demand.
b. a decrease in aggregate demand.
c. an increase in aggregate supply.
d. a decrease in aggregate supply.
Which definition of the money supply includes credit cards?
a. M1.
b. M2.
c. M3.
d. None of these includes credit card balances.
A mismatch of the skills of unemployed workers and the skills required for existing
jobs is defined as:
a. involuntary unemployment.
b. cyclical unemployment.
c. structural unemployment.
d. frictional unemployment.
Exhibit 10-8 Aggregate demand and supply
In Exhibit 10-8, if aggregate
demand shifts from AD1 to AD2,
a. real GDP will increase from $3.0 to $7.0, and the price level will remain the same.
b. real GDP will increase from $3.0 to $4.0, and the price level will remain the same.
c. real GDP and the price level will both remain the same.
d. real GDP will increase from $3.0 to $4.0, and the price level will increase from 100
to 140.
