The Federal Reserve was established in 1913 to
A) prevent inflation by decreasing the money supply.
B) stimulate the economy by increasing bank reserves.
C) stop bank panics by acting as a lender of last resort.
D) prevent bad loans by requiring banks to hold reserves.
Answer: C
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When the economy switches production toward services and away from manufacturing and workers in the manufacturing industry are permanently laid off
A) frictional unemployment decreases. B) structural unemployment increases. C) cyclical unemployment increases. D) frictional and cyclical unemployment increase.
Refer to the information provided in Figure 30.1 below to answer the question(s) that follow.
Figure 30.1Refer to Figure 30.1. Which of the following could cause a movement from Point C to Point B?
A. a decrease in the interest rate B. an increase in the interest rate C. positive growth in aggregate output D. negative growth in aggregate output