Econ Final Test Preactice

Front

What is the U-2 measure of labor underutilization?

Back

3.1%.

Front

What changes allow a bank to lend out an additional $10,000 if the reserve requirement is 10 percent?

Back

The Fed buys a $10,000 bond from the bank or the Fed lends the bank $10,000.

Front

If a bank has an 8 percent reserve requirement and $10,000 in deposits, how much does it have in reserves and loans?

Back

It has $800 in reserves and $9,200 in loans.

Front

What type of unemployment results from the time it takes for workers to find jobs that suit their skills?

Back

Frictional unemployment.

Front

If the economy starts at point Y, where does a recession occur?

Back

At point W.

Front

What is the definition of reserve requirement in banking?

Back

The percentage of deposits that banks must hold as reserves.

Front

What is the natural rate of unemployment?

Back

The level of unemployment that exists when the economy is at full employment.

Front

What is cyclical unemployment?

Back

Unemployment that results from economic downturns or recessions.

Front

What is structural unemployment?

Back

Unemployment that occurs when workers' skills do not match the jobs available.

Front

How does the Federal Reserve influence the money supply?

Back

By buying or selling government bonds.