1. Using the numbers from the previous question, what is the size (in millions) of the country’s labor force?

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:

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