A trough in the business cycle occurs when:
A. the natural rate of unemployment is at a minimum point.
B. employment and output reach their lowest levels.
C. cyclical unemployment is at a minimum point.
D. structural and frictional unemployment are at their highest levels.
Answer: B
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If the Fed buys $10 million of government securities when the desired reserve ratio is 20 percent and the currency drain ratio is 5 percent, the quantity of money
A) increases by $42 million. B) increases by $50 million. C) decreases by $42 million. D) decreases by $50 million. E) increases by $7.5 million.
The Federal Reserve primarily uses open-market operations to change the money supply
a. True b. False Indicate whether the statement is true or false
Americans are creating an enormous amount of solid waste daily—over 4 pounds per person per day. How is the United States coping with this extraordinary problem?
What will be an ideal response?
An indirect cost of government debt is:
A. it can distort the credit market and slow economic growth. B. it can cause unemployment below the natural rate. C. it can cause hyperinflation. D. All of these are true.