Question

question 28 · 1 point
how do changes in the reserve requirement affect the money multiplier?
select the correct answer below:
○ the money multiplier increases when the reserve requirement increases
○ the money multiplier decreases when the reserve requirement increases
○ the money multiplier decreases when the reserve requirement decreases
○ the money multiplier is not affected by changes in the reserve requirement
content attribution
question 29 · 1 point
which of the following people is considered to be in the labor force?
select all that apply:
□ gina is a stay - at - home mom and volunteers teaching sunday school at her local church.
□ sandy quit her job in order to tend to her ailing parents.
□ ronald is currently looking for a job in engineering.
□ nancy is working full - time at her companys corporate office.

Explanation:

Question 28

The money multiplier formula is \( \text{Money Multiplier} = \frac{1}{\text{Reserve Requirement Ratio}} \). When the reserve requirement (ratio) increases, the denominator of this fraction increases, so the overall value of the money multiplier decreases. When the reserve requirement decreases, the money multiplier increases. So the correct relationship is that the money multiplier decreases when the reserve requirement increases.

The labor force includes people who are employed or unemployed (actively looking for work). Gina is a stay - at - home mom and a volunteer (not in paid work or looking for paid work), so not in the labor force. Sandy quit her job and is not looking for work (tending to parents), so not in the labor force. Ronald is actively looking for a job (unemployed, so in labor force), and Nancy is working full - time (employed, so in labor force).

Answer:

B. the money multiplier decreases when the reserve requirement increases

Question 29