After the Fed makes an open market purchase of bonds, the deposit-creation process may continue only to the point where
a. the Fed reverses course and sells bonds
b. the Fed changes the required reserve ratio
c. all excess reserves have been converted into required reserves
d. all required reserves have been converted into excess reserves
e. the Fed raises interest rates
C
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An inward shift of the production possibilities frontier represents
A) negative economic growth. B) a rise in the unemployment rate. C) technological improvement. D) positive economic growth.
The per-worker production function relates output per worker
A) to capital per worker. B) to the participation rate. C) to production per worker. D) in different countries.
When the U.S. economy is at its full-employment level, the unemployment rate is not equal to zero because:
a. cyclical unemployment is always present in a modern economy. b. of the statistical discrepancy. c. voluntary unemployment is always positive. d. frictional and structural unemployment are always present in a modern economy. e. there are always people who are too lazy to work.
Which of the following does the long-run Phillips curve tell us?
a. That output can be below potential in the long run b. That the unemployment rate can take on any value in the long run c. That output can be maintained above potential in the long run d. That unemployment will return to the natural rate in the long run e. That the inflation rate cannot rise above 10 percent in the long run