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26 terms

Macro Chap. 15 & 16

Mary worked part-time for her mother's business without pay. Larry was absent from work because he had the flu. Who is counted as employed by the BLS?
Both Mary and Larry
The labor-force participation rate measures the percentage of the
total adult population that is in the labor force.
In June 2009 the BLS reported an adult population of 234.9 million, a labor force of 154 million and employment of 141.6 million. Based on these numbers the unemployment rate was
What is the labor force participation rate?
The labor force participation rate is the ratio between the labor force and the overall size of the population
Marginally attached workers are people who
are not working and are not looking for work, but would work if asked.
In one year, you meet 52 people who are each unemployed for one week and eight people who are each unemployed for the whole year. What percentage of the unemployment spells you encountered was short-term, and what percentage of the total number of unemployment weeks reported over the year was long-term?
86.7 percent and 88.9 percent
Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills is called
Frictional Unemploment
Which of the following is not an explanation for the existence of structural unemployment?
Job Search
Every month, the Bureau of Labor Statistics surveys 160,000 business establishments to help determine
the number of jobs the economy has gained or lost.
Unions contribute to
both structural unemployment and the natural rate of unemployment.
Efficiency wages
increase structural unemployment by keeping wages above equilibrium.
Economists use the term "money" to refer to
those types of wealth that are regularly accepted by sellers in exchange for goods and services.
Most financial assets other than money function as
a store of value, but not a unit of account nor a medium of exchange
Which list ranks assets from most to least liquid?
money, bonds, cars, houses
When in France you notice that prices are posted in euros, this best illustrates money's function as
a unit of account
Currently, U.S. currency is
fiat money with no intrinsic value
M1 includes
currency, demand deposits, traveler's checks
Which group within the Federal Reserve System meets to discuss changes in the economy and determine monetary policy?
the FOMC
At any meeting of the Federal Open Market Committee, that committee's voting members consist of
5 Federal Reserve Regional Bank Presidents and all the members of the Board of Governors.
When conducting an open-market sale, the Fed
sells government bonds, and in so doing decreases the money supply.
When conducting an open-market purchase, the Fed
sells government bonds, and in so doing decreases the money supply.
A bank which must hold 100 percent reserves opens in an economy that had no banks and a currency of $100. If customers deposit $50 into the bank, what is the value of the money supply?
Under a fractional-reserve banking system, banks
generally lend out a majority of the funds deposited.
The money multiplier (in a simplified banking system where money supply is demand deposits) equals
1/R, where R represents the reserve ratio for all banks in the economy.
Which tool of monetary policy does the Federal Reserve use most often?
Open-market operations
The interest rate the Fed charges on loans it makes to banks is called
the discount rate.