1. If the actual reserve/deposit ratio equals 8% and the desired reserve/deposit ratio for this bank is 10%, the bank should:
- make more loans in order to earn interest.
- do nothing because this is a profitable situation.
- stop making loans.
- request that customers withdraw deposits from the bank.
- send the extra reserves to the central bank.
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2. Frictional unemployment is:
- the extra unemployment that occurs during periods of recession.
- the unemployment that results when people retire or leave the labour force
- short-term unemployment that is associated with the process of matching workers with jobs
- the additional unemployment not captured in official statistics resulting from discouraged workers and the involuntary part-time workers.
- long-term and chronic unemployment that exists even when the economy is producing at a normal rate.
3. A higher equilibrium Y and a lower equilibrium i are best explained by _____
- an increase in the money supply
- an increase in money demand
- an increase in autonomous expenditure
- an decrease in the money supply
- an decrease in autonomous expenditure
4. An increase in the value of a currency relative to other currencies is called a(n):
5. A decrease in the official value of a currency in a fixed-exchange-rate system is called a(n):