Problem 1. The Bureau of Labor Statistics announced that of all adult, 180,100,000 were employed, 24,000,000 were unemployed, and 90,000,000 were not in the labor force. Use this information to calculate: a. the adult population b. the labor force c. the labor-force participation rate d. the unemployment rate

Problem 2. Like Bank starts with $3000 in bank capital. It then accepts $2000 in deposits. It keeps 25 percent of deposits in reserve. It uses the rest of its assets to make bank loans. a. Show the balance sheet of Like Bank. b. What is Like Bank's leverage ratio? c. Suppose that 15 percent of the borrowers from like Bank default and these bank loans become worthless. Show the bank's new balance sheet.

Problem 3. Suppose that the reserve requirement for checking deposits is 5 percent and that banks do not hold any excess reserves. If the Fed sells $3 million of government bonds, what is the effect on the economy's reserves and money supply?