In an economy, 23 million people are employed and 2 million are unemployed, but 5 million part-time workers would prefer full-time work. What is the unemployment rate?

Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?

a. The real risk-free interest rate rises, and nominal value of the domestic currency falls. b. The real risk-free interest rate falls, and nominal value of the domestic currency falls. c. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same. d. The real risk-free interest rate rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.

Assume a simplified banking system subject to a 20 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000, the money supply

A. increases $100,000. B. increases $500,000. C. increases $600,000. D. decreases $500,000.