The replacement ratio measures
a) The number of people in work who could be made redundant without affecting the size of the economy
b) The number of people in employment relative to those unemployed
c) the benefits available relative to wages that could be earned
d) The number of people voluntarily unemployed
Answer: c) the benefits available relative to wages that could be earned
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When money is used to purchase goods and services, it serves as a:
A. medium of exchange. B. double coincidence of wants. C. store of value. D. unit of account.
Based on the model of the money market, if the Federal Reserve increases the reserve requirement, the equilibrium interest rate should
A) stay the same. B) increase. C) decrease. D) increase to the same extent that the demand for money increases.
An economy is at full employment when ________
A) the unemployment rate is zero B) there is no frictional unemployment C) the unemployment rate equals the natural unemployment rate D) there is no structural unemployment
Price ceilings sometimes result in some buyers and sellers purchasing the good at prohibited prices
Indicate whether the statement is true or false