Author Question: The Fed purchases 100 million of U.S. government securities from First National Bank. The balance ... (Read 115 times)

dalyningkenk · **on:** Jun 29, 2018

The Fed purchases 100 million of U.S. government securities from First National Bank. The balance sheet for First National Bank shows ________ in its total assets and ________ in its total liabilities.

A) no change; no change
B) a 100 million increase; a 100 million increase
C) a 100 million decrease; a 100 million increase
D) a 100 million increase; no change
E) a 100 million increase; a 100 million decrease

Question 2

Suppose the current unemployment rate is 5 percent, the labor force is 400 million people, the labor force participation rate is 80 percent and the working-age population is 500 million people. What number of people are unemployed?

What will be an ideal response?

akpaschal · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

The number of unemployed people equals the labor force multiplied by the unemployment rate. Hence the number of unemployed people is (400 million) (5 percent) = 20 million people.