The required reserve ratio is
a. the minimum fraction of vault cash balances that banks must hold as reserves.
b. the minimum fraction of all assets that banks must hold as reserves.
c. the minimum fraction of all liabilities that banks must hold as reserves.
d. the minimum fraction of checking account balances that banks must hold as reserves.
e. the minimum fraction of loans that banks must make sure are repaid.
D
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Assume that the labor market for auto mechanics is initially in equilibrium. Which of the following would lead to an increase in both the wage rate and employment for auto mechanics?
a. a decrease in the price of a substitutable input b. a decrease in the price of a complementary input c. an increase in training costs for auto mechanics d. a decrease in wages in an alternate labor market e. a decrease in demand for the output of firms employing auto mechanics
Which of the following will be most likely to cause the production possibilities curve for a country to shift inward?
a. an increase in the labor force b. an increase in unemployment c. development of an improved technological method of production d. a decrease in the stock of physical capital