1.The long-run Phillips Curve indicates that there is no relationship between inflation and unemployment in the long run. Therefore, which of the following would cause an increase in the natural rate of unemployment and shift the LRPC to the right?

a. An increase in unemployment benefits for the long-term unemployed

b. The elimination of various social welfare programs

c. A decrease in the duration of unemployment

d. An increase in core inflation rates.

e. Expansionary monetary policies.

2.The most likely effect of an increase in the supply of loanable funds is which of the following?

I. Increase Interest Rates.

II. Decrease Interest Rates.

III. Increase Investment.

IV. Decrease Investment.

a. I only

b. II only

c. III only

d. I and IV only

e. II and III only.

3.If on receiving a checking deposit of $300 a bank's excess reserves increased by $255, the required reserve ratio must be

a. 5%

b. 15%

c. 25%

d. 35%.

e. 45%.