The Bureau of Labor Statistics divides the adult population into three categories: employed, unemployed, and not in the labor force

Suppose that the Federal Reserve issued bonds in the amount of $45 million and the reserve requirement was 10%, what would be the resulting change to the money stock?

A) $45 million B) $450 million C) $4.5 million D) The bond issuance would not impact the money stock only the monetary base.

If high-level executives of a company award themselves sizable bonuses even though the firm they manage is making losses and performing poorly, this event is most likely to arise because of

a. the law of diminishing marginal returns. b. competition among business firms for high-level executives. c. economies of scale. d. the principal-agent problem.