1.An unemployment rate of 8 percent implies that: the number of unemployed peopl
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Question
1.An unemployment rate of 8 percent implies that:
the number of unemployed people is 8 percent of the population aged thirty and above.
2.Which of the following statements is correct?
3.Other things equal, the level of real GDP will tend to increase in the short run:
4.One uniquely American aspect of central banking is that
5.The federal funds market rate is:
6.If inflation is the major problem in an economy, which of the following would be an appropriate monetary policy response?
8 percent of the population over the age of 16 is unemployed.Explanation / Answer
1) unemployment rate shows that 8% of the population above 16 years us unemployed.
2) Unemployment allowance is given to the people who are unable to find job . This decreases their opportunity cost of remaining unemployed. Unemployment compensation in U.S. is up to $450. Frictional Unemployment occurs when people move from one job to another. The frictional Unemployment will be zero when there is equilibrium. Thus this last statement is true.
3) Real Gdp will increase when discount rate is reduced. This will allow commercial banks to take more loans from the fed, which will increase the money supply in the economy, thereby leading to increase in output in the short run.
4) There are 12 federal banks or central bank and 24 branches in thw the federal reserve system in the U.S.
5) It is the rate charged on loans provided by one Bank to another to meet the reserve requirement.
6) Sale of government bonds is a contractionary policy tool that will reduce the money supply in the economy and thereby reduce inflation.
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