1: Suppose the unemployment rate is really low, but the underemployment rate is much higher than average. What does this tell us about the state of the economy?

A. The economy is doing better than the unemployment rate may show

B. We are likely experiencing economic expansion

C. People are having trouble finding high quality jobs

D. People are having trouble finding a job

2: If the reserve ratio is 20% and the Fed increases reserves by $25 million, what is the change in the money supply?

A. $25 million

B. $125 million

C. $5 million

D. $30 million