QUESTION 1 The money that has no intrinsic value is called as a. flat money. b. fiat money. c. commodity money. d. useless money. 4 points QUESTION 2 In fractional reserve banking system banks have to...

QUESTION 1

1. The money that has no intrinsic value is called as
   

   	a.	flat money.
   	b.	fiat money.
   	c.	commodity money.
   	d.	useless money.

4 points

QUESTION 2

1. In fractional reserve banking system

   		banks have to maintain the whole deposit as reserve.
   		banks have to maintain 50%of the deposits as reserve.
   		banks have to maintain a percentage of deposit as reserve.
   		banks do not need to maintain any deposits as reserve.

4 points

QUESTION 3

1. Table
   

   Sunshine Community Bank
   Assets		Liabilities
   Reserves	$50,000	Deposits	$500,000
   Loans	$460,000

   
   Refer to Table. Sunshine Community Bank has maintains4% of their deposits as an excess reserve. What will be money multiplier in this scenario?
   

   	a.	10
   	b.	16.67
   	c.	25
   	d.	20

4 points

QUESTION 4

1. If there is a recession in the economy then Fed may act by
   

   	a.	buying bonds. This buying would increase the money supply.
   	b.	buying bonds. This buying would reduce the money supply.
   	c.	selling bonds. This selling would increase the money supply.
   	d.	selling bonds. This selling would reduce the money supply.

4 points

QUESTION 5

1. The rate at which the Fed lends money to banks is

   	a.	the prime rate.
   	b.	fixed at 4%.
   	c.	the federal funds rate.
   	d.	the discount rate.

4 points

QUESTION 6

1. In 100%reserve banking system

   		banks are able to create some money.
   		banks are unable to create any money.
   		banks gives all the money as loan to others.
   		banks gives each other loans.

4 points

QUESTION 7

1. Suppose that Palm Beach Bankcurrently has $200,000 in demand deposits and $130,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. What is this bank's required reserve?

   		$20,000.
   		$33,000.
   		$13,000.
   		$7,000.

4 points

QUESTION 8

1. An open-market purchase
   

   	a.	increases the number of dollars and the number of bonds in the hands of the public.
   	b.	increases the number of dollars in the hands of the public and decreases the number of bonds in the hands of the public.
   	c.	decreases the number of dollars and the number of bonds in the hands of the public.
   	d.	decreases the number of dollars in the hands of the public and increases the number of bonds in the hands of the public.

4 points

QUESTION 9

1. Table. Bank of Pleasantville

   Assets	Liabilities
   Reserves $4,000	Deposits $50,000
   Loans 46,000

   
   Refer to Table.If the bank above do not maintain any excess reserve then the reserve ratio would be
   

   
   

   	a.	17.5 percent.
   	b.	8 percent.
   	c.	92 percent.
   	d.	100 percent.

4 points

QUESTION 10

1. The central bank of the U.S is
   

   	a.	U.S. Treasury
   	b.	Federal Reserve
   	c.	Department of Justice
   	d.	Federal Trade Commission

4 points

QUESTION 11

1. If the reserve ratio is 20 percent, the money multiplier is

   	a.	100.
   	b.	5.
   	c.	9/10.
   	d.	1/20.

4 points

QUESTION 12

1. Dollar bills and coins are called as

   		Fiat money.
   		Commodity money.
   		Mettalic money.
   		Paper money.

4 points

QUESTION 13

1. If the central bank in some country decrease the reserve requirement, then the money multiplier for that country

   	a.	would increase.
   	b.	would not change.
   	c.	would decrease.
   	d.	could do any of the above.

4 points

QUESTION 14

1. The employed category as per BLS

   	a.	would include onlysomeone who works in their family businesswith pay whether full time or part time.
   	b.	can includesomeone who works in their family businesswith orwithout pay and isfull time or part time.
   	c.	would include only someone who works in their family businesswith pay and is full time.
   	d.	can include only someone who works in their family businesswith orwithout pay and is full time.

4 points

QUESTION 15

1. You are given the following data of a labor market for an imaginary economy?

   Hourly Wages	Quantity Demanded	Quantity Supplied
   $8	10,000	6,000
   $10	9,000	7,000
   $12	8,000	8,000
   $13	7,000	9,000
   $15	6,000	10,000

   Assume that the government of this economy imposed a minimum wage of $10. As a result

   
   

   
   

   		9,000 people will be employed.
   		8,000 people will be employed.
   		2,000 people will be unemployed.
   		zero people will be unemployed.

4 points

QUESTION 16

1. Amber specializes in making custom dresses and looking for a work opportunity in that area. Alex on the other hand just got a degree in business and looking for a job as an business analyst. Which one of the following seems to be true based on these scenarios?

   	a.	Amber is structurally unemployed, and Alex is frictionally unemployed.
   	b.	Amber and Alex are both frictionally unemployed.
   	c.	Amber and Alex are both structurally unemployed.
   	d.	Amber is frictionally unemployed, and Alex is structurally unemployed.

4 points

QUESTION 17

1. Preetiis a full time student at Queens college pursing an economics degree. She is not working at present. BLS will count Preeti as

   	a.	neither unemployed nor in the labor force.
   	b.	not in the labor force but unemployed.
   	c.	in the labor force but unemployed.
   	d.	not unemployed but in the labor force.

4 points

QUESTION 18

1. In an industry the equilibrium wage is $20 per hour.Any wage above $20per hour would cause

   	a.	neither frictional nor structural unemployment.
   	b.	structural but not frictional unemployment.
   	c.	both frictional and structural unemployment.
   	d.	frictional but not structural unemployment.

4 points

QUESTION 19

1. Table
   Labor Data for an imaginary economy

   

   Refer to Table.Based on this data which of the following statement is correct?

   	a.	The Labor Force Participation Ratefor this economy in 2012 was53.3%.
   	b.	The Labor Force Participation Ratefor this economy in2012was56.25%.
   	c.	The Labor Force Participation Rate for this economy in 2012 was50%.
   	d.	The Labor Force Participation Ratefor this economy in2012was88.9%.

4 points

QUESTION 20

1. Animaginary economy of Fruitslandhas the following data:Adult Population = 50 millionLabor Force Participation Rate = 70%Unemployment rate of 3%Based on this information how many people were EMPLOYED in this economy?

   	a.	23.52 million
   	b.	35 million
   	c.	33.95 million
   	d.	1.05 million

4 points

QUESTION 21

1. In an economy, the natural rate of unemployment is 2% but the actual unemployment rate is 5%. Based on this information, which statements seem to be accurate?

   		The difference between the two rates is called structural unemployment.
   		The difference between the two rates is called cyclical unemployment.
   		The difference between the two is called structural unemployment.
   		The difference between the two is called minimal unemployment.

4 points

QUESTION 22

1. Ryan just finished his bachelor's degree in computer science and is looking for a job in a tech company. In school, he was a full-time student and did not work. How is Ryan entering the labor market will affect the unemployment rate for the economy?

   		The unemployment rate of the economy will decrease.
   		The unemployment rate of the economy will increase.
   		The labor force participation rate of the economy will decrease.
   		The labor force participation rate of the economy will stay the same as before.

4 points

QUESTION 23

1. Efficiency wages,unions and minimum wage laws may

   	a.	contribute to structural unemployment, but not the natural rate of unemployment.
   	b.	contribute to the natural rate of unemployment, but not structural unemployment.
   	c.	contribute toneither structural unemployment nor the natural rate of unemployment.
   	d.	contribute to both structural unemployment and the natural rate of unemployment.

4 points

QUESTION 24

1. As per the BLS the people who would like to work but have given up looking for a job

   	a.	are counted in unemployed category and this will decrease the unemployment rate.
   	b.	are not included in the labor force therefore,will reflect a lower unemployment rate compared to the situation when they are included in labor force.
   	c.	are not included in the labor force therefore,willreflecta higher unemployment rate compared to the situation when they are included in labor force.
   	d.	are counted in unemployed category and this will increase the unemployment rate.

4 points

QUESTION 25

1. Eric who previously worked in his family business without pay has now started his own sole proprietorship business. Eric will be counted in

   		employed category in both cases.
   		unemployed category before but employed category afterward.
   		employed category before but unemployed category afterward.
   		unemployed category in both cases.