The table shows the components of money supply:

Item

Billions of dollars

Small time deposits

630

Large time deposits

645

Money market deposit accounts

575

Money market mutual funds

425

Checkable deposits

448

Noncheckable savings deposits

300

Currency

170

Estimate the following:

M1

M2

Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate of unemployment is 9 percent. Use Okun’s law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500 billion in that year, how much output is being forgone because of cyclical unemployment?

What is the major difference between a person who is frictionally unemployed                                                      and one who is structurally unemployed?

What criteria must be met for a person to be characterized as unemployed?

How is a discouraged worker different from an unemployed worker?



Suppose there are 120 million people in the civilian labour force and 100

million people employed. How many people are unemployed? What is

          the unemployment rate?

In the first quarter of the year, Real GDP was $400 billion; in the second

   quarter, it was $398 billion; in the third quarter, it was $399 billion; and in the

   fourth quarter, it was $395 billion. Has there been a recession? Explain your

   answer.

Consumption spending is $3.708 trillion, spending on nondurable

       goods is $1.215 trillion, and spending on services is $2.041 trillion. What does

       spending on durable goods equal?

Nondurablegoods spending = $400 million, durable goods spending = $300

      million, new residential housing spending = $200 million, and spending on

      services = $500 million. What does consumption equal?

If government intends to reduce the amount of supply in the system, explain

three practical steps he should take to achieve that.

  a. Explain how institutional factors promote economic growth in these areas:

promotion of modern technology

the flow of resources to the most productive areas.

Explain how expansionary fiscal policy works in an economy

Suppose that the banking system in Ghana has a required reserve ratio of 10

           percent while the banking system in the Ivory Coast has a required reserve

           ratio of 20 percent.

In which country would $100 of initial excess reserves be

able to cause a larger total amount of money creation?

For the two countries, if an amount of $2000 each are deposited at

two separate ban banks in both countries and decides to give $600 as

loans, what is the maximum amount of money that can be created

in both countries with that deposit

With the aid of illustration (s) explain in detail why countries push for

specialization in international trade.

Question

Item	Billions of dollars
Small time deposits	630
Large time deposits	645
Money market deposit accounts	575
Money market mutual funds	425
Checkable deposits	448
Noncheckable savings deposits	300
Currency	170

Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate of unemployment is 9 percent. Use Okun’s law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500 billion in that year, how much output is being forgone because of cyclical unemployment?