4) Suppose job search has decreased over the last several years. This decrease could be a result of

i) a change in unemployment benefits.

ii) a positive structural change.

iii) a higher inflation rate.

A) ii only

B) i only

C) i and ii

D) ii and iii

E) i and iii

5) The figure above shows the U.S. production function. How would an increase in income taxes be shown in the figure?

A) a movement from point C to point B

B) a movement from point A to point B

C) an upward shift or rotation of the production function

D) a downward shift or rotation of the production function

E) None of the above because the effects of an increase in taxes cannot be shown in the figure.

6. At one time, the country of Freedonia had no banks, but had currency of $40 million. Then a banking system was established with a reserve requirement of one-third. The people of Freedonia now keep half their money in the form of currency and half in the form of bank deposits. If banks do not hold excess reserves, the money supply after the first round of deposit is closest to:

a.$13.33 million

b.$20 million

c.$33.34 million

d.$36.36 million