Bill is fired from his current job he decides to

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23. Bill is fired from his current job. He decides to spend some time traveling the world – thinking about what he might want to do in the future – rather than immediately looking for a new job. The labor force participation rate will _____ and the unemployment rate will _____. a) fall; fall b) fall; rise c) rise; fall d) rise; rise 24. Mary is a full-time student who graduates from college and begins looking for a job. The labor force participation rate will _____ and the unemployment rate will ______. Exam II – Pink Version Page 3 of 5 Spring 2010
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25. Jose has been looking for a job for over a year. There just don’t seem to be any jobs available, he decides, so he stops looking for a job. The labor force participation rate will ____ and the unemployment rate will _____. 26. Suppose the public decides it wishes to hold more cash. Ceteris paribus, this action will cause reserves and excess reserves in the banking system to ____ and the supply of money to _____. 27. If the efficient markets hypothesis is true, the average investor should: a) use technical and fundamental analysis to find stocks that are undervalued or overvalued. Buying undervalued stocks and selling overvalued stocks will increase her return. b) rely on professional stock brokers to find a portfolio that will consistently outperform the market average return at low risk. c) decide what fraction of her wealth she is willing to hold in a broadly diversified portfolio of risky assets and put the remainder in relatively risk free assets (savings accounts or Treasury Bills). d) avoid the risk found in the stock and bond markets, and hold her wealth in gold and silver. 28. A U.S. company uses U.K. pounds it already owned to purchase bonds issued by a company in the U.K. Which of these countries has an increase in net capital outflow?
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  • Spring '08
  • RobertHoland
  • Inflation, net capital outflow, u.s. net capital, net capital outflows

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