Why is the money multiplier in the United States smaller than the inverse of the required reserve ratio?
What will be an ideal response?
The formula for the money multiplier assumes that all loans make their way directly into checking accounts. In reality, people hold part of their loans as cash, and that cash is therefore not available for the banking system to lend out. Also, banks hold excess reserves rather than lending all of them out. For both of these reasons the multiplier is smaller in reality than in the illustrations in this chapter.
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Describe the political marketplace. Who are the participants, what do they do, and what is a political equilibrium?
What will be an ideal response?
From 1977-2011, the average duration of unemployment has been highest in which of the following places?
A) Canada B) Europe C) Mexico D) the United States
Between 1870 and 1920, the U.S. labor force:
a. grew at about the same rate as the population. b. grew more rapidly than the population. c. fell despite rising population. d. grew at a slightly lower rate than the population.
Real GDP refers to:
a) the value of the domestic output after adjustments have been made for environmental pollution and changes in the distribution of income. b) GDP data that embody changes in the price level, but not changes in physical output. c) GDP data that reflect changes in both physical output and the price level. d) GDP data that have been adjusted for changes in the price level.