Ecn 211 Midterm 1 Study Guide Graded A+

Interest rate paid on reserves {Ans: 2 main types: interest rate on required reserves (IORR) interest rate on excess reserves (IOER) Lowering the interest rate encourages banks to lend out more money.}Marginally Attached Workers {Ans: Has not looked for work within past 4 weeks but has searched for work within past 12 months}Structural unemployment {Ans: Unemployment due to market not being able to supply as many jobs as demanded}Which of the following was not a reason discussed in class (and on class slides) why GDP is incorrectly measuring human welfare {Ans: It fails to adjust for the difference between exports and imports}Fractional Reserve Banking means banks {Ans: Hold less than 100% of deposits as reserves}The Federal Reserve Act was passed to do which two things? {Ans: Centralize reserves and distribute a national currency}