1. Using the numbers from the previous question, what is the size (in millions) of the country’s labor force?
a. 32
b. 26
c. 38
d. 35
e. 31
ANSWER:
2. If the reserve requirement is 8%, and the central bank increases the quantity of reserves in the banking system by $6.4 billion, the money supply increases (in billions of dollars) by:
a. 0
b. 1.152
c. 75
d. 9.6
e. 80
ANSWER:
3. A bank has capital of $50 million, and a leverage ratio of 8. If the value of the bank’s assets decline by 10%, then its capital will be reduced to (in millions of dollars):
a. 45
b. 8
c. 10
d. 0
e. 20
f. -30
ANSWER:
