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You can also use your keyboard to move the cards as follows: If you are logged in to your account, this website will remember which cards you know and don't know so that they The difference between equilibrium output and full-employment output. Which of the following is NOT a basic monetary policy tool used by the Fed? d. commercial bank, Assume all money is held in the form of currency. B. When aggregate demand exceeds the full-employment level of output, the result is: LEFT ARROW - move card to the Don't know pile. If the number of dollars you receive every year is the same, but prices are rising, then your nominal income: Stays the same but your real income falls. A change in government spending, a change in taxes, and monetary policy. Of these, 43 were sold for $\$ 105,000$ each and two remain in finished goods inventory. See Answer Ceteris paribus, if the Fed raised the required reserve ratio: Expert Answer c. If the price of computers falls during a period when the average price level remains constant, which of the following has occurred? \text{Manufacturing overhead} \ldots & 1,200,000 \\ \text{Total uncollectible? B) The lending capacity of the banking system decreases. For the federal deficit to be lowered, a) the federal gov't must decrease its spending and increase net exports. Within the Federal Reserve, the organizational body that is responsible for conducting open market operations (i.e., the buying and selling of government securities) is the (a) FOMC (b) Board of Governors (c) Board of Directors (d) Federal Reserve Ban, Which of the following is the basic economic policy function of the Federal Reserve Banks? If the Federal Reserve decreases money supply, then a) The money supply curve will shift up and interest rates will increase b) The money supply curve will shift up and interest rates will decrease. D. change the level of reserves it holds for banks. \textbf{Year Ended December 31, 2019}\\ If the Federal Reserve increases the rate of money growth and maintains it at the new higher rate, eventually expected inflation will and the short-run Phillips curve will shift . a. decrease, downward b. decrease. U.S.incometaxrateontheU.S.divisionsoperatingincome40%FrenchincometaxrateontheFrenchdivisionsoperatingincome45%Frenchimportduty20%Variablemanufacturingcostperchainsaw$100Fullmanufacturingcostperchainsaw$175Sellingprice(netofmarketinganddistributioncosts)inFrance$300\begin{matrix} &\textbf{past due}&\textbf{past due}&\textbf{past due}\\[5pt] The following information is available: Suppose the United States and French tax authorities only allow transfer prices that are between the full manufacturing cost per unit of $175 and a market price of$250, based on comparable imports into France. Increase; appreciate b. c) increases government spending and/or cuts taxes. Generally, the central bank. If the Fed sells $29 million worth of government securities in an open market operation, then the money supply can: A. increase by $2.9 million. a. decrease, downward b. decrease, upward c. increase, downw, When the Federal Reserve engages in a restrictive monetary policy, the price of marketable government bonds will ___, assuming all other factors influencing the bond market remain the same. C. influence the federal funds rate. Now suppose the. a. decreases; falls b. decreases; rises c. does not change; falls d. increases; rises e. increases; falls, At 3% unemployment which is likely to happen, the Federal Reserve should: A. sell bonds increasing the price of bonds and driving up the interest rates. \text{General and Administrative Expense}&\text{\hspace{12pt}425,000}&\text{\hspace{12pt}425,000}\\ The Federal Reserve has a few main goals with respect to the economy: to promote maximum employment, keep prices stable and ensure moderate long-term interest rates. The sale of bonds to the Fed by banks B. Get access to this video and our entire Q&A library, Monetary Policy & The Federal Reserve System. The Federal Reserve (or Fed) often executes its policy by selling or buying U.S. government securities in the open market, which in turn influences the quantity of real money balances. b) means by which the Fed acts as the government's banker. The Dutch East India Company (also known by the abbreviation "VOC" in Dutch) was the first publicly listed company ever to pay regular dividends. C. sell bonds lowering the, If The Fed decides to buy bonds & securities in the open market, it will likely: a. increase the money supply and decrease aggregate demand. The U.S. Treasury c. The U.S. Mint d. The federal government And involves: a. Quantitative easing b. Some terms may not be used. c. Fed sells bonds. What is the impact of the purchase on the bank from which the Fed bought the securities? A, Suppose that the Fed engages in an open-market purchase of $4,000 in securities from Bank A. a. B. decreases the money supply, which leads to increased interest rates and a rise in investment spending. The result is imperfect monitoring, which creates profit opportunities for speculators, who do not act as dealers but simply A sale of treasury bills by the federal reserve _____ interest rates and _____ the money supply. c. When the Fed decreases the interest rate it p; Also assume the Federal Reserve conducts an Open Market Operations purchase of U.S. Treasury securities in the amoun, Assume that the reserve requirement is 20 percent, banks do not hold excess reserves, and there is no cash held by the public. a. increase the nominal interest rate and increase output b. decrease the n. To reduce interest rates, the Fed buys $500 of T-bills which increases the money supply by $2000. Note The higher the reserve requirement, the less profit a bank makes with its money. Which of the following could cause a recession? c. They wil, If the Federal Reserve buys bonds on the open market then the money supply will a. increase causing a decrease in investment spending shifting aggregate demand to the right. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. (A) How will M1 be affected initially? B. increase the supply of bonds, decrease bond prices, and increase interest rates. The Fed wishes to increase the money supply it can, Economics Chapter 15 (BEST ALL THE ANSWERS), Sp 8 Unidad 1A - Un fin de semana en Madrid. The lender who forecloses will then end up with about $40,000. a. c. the Federal Reserve System. C. The value of the dollar will decrease in foreign exchange markets. If the Fed sells government bonds, this will: A. D. decrease, Assume that the Federal Reserve establishes a minimum reserve requirement of 12.5%. Which of the following is likely to cause a leftward shift in the aggregate supply curve, ceteris paribus? B. the sellers of such securities buy new securities in the open market and t. Assume there is no leakage from the banking system and that all commercial banks are loaned up. Open market operations When the Fed sells government securities, it: a. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public. a)increases; increases b)increases; decreases c)decreases; increase, If the Federal Reserve increases the rate of money growth and maintains it at the new higher rate, eventually expected inflation will (blank) and the short-run Phillips curve will shift (blank). Ceteris paribus, if the Fed raised the required reserve ratio: Question: Ceteris paribus, if the Fed raised the required reserve ratio: This problem has been solved! If the Fed uses open-market operations, should it buy or sell government securities? Banks must hold more funds used for loans in reserve. (ii) instructs the New York Fed to sell government securities in the foreign exchange market. d) borrow reserves from the Federal Reserve. c. the government increases spending and lowers taxes. D. all of the above. a. higher, higher b. higher, lower c. lower, higher d. lower, lower, When lots of people put their money into bonds, the demand for money and the interest rate on bonds. If the Federal Reserve increases the nominal supply of money, all else equal: a. the demand for money increases. What are some basic monetary policy tools used by the Fed? }\\ \text{Total per category}&\text{?}&\text{?}&\text{? b. c. Offer rat, 1. Make sure to remember your password. Should the Fed increase or decrease the money supply? B. a) increases; decreases, b) decreases; increases, c) decreases; decreases, d) increases; increases. 41. Use these flashcards to help memorize information. b. When the Federal Reserve sells bonds as a part of a contractionary monetary policy, there is: A. An increase in the money supply: A. lowers the interest rate, causing a decrease in investment and an increase in GDP B. lowers the interest rate, causing an increase in investment and a decrease in GDP C. lowers the interest rate, causing an increase in, If there is a negative supply shock and the Federal Reserve responds by increasing the growth rate of the money supply, then in the short run the Federal Reserve's action: a. lowers both inflation and unemployment. The nominal interest rates rises. c) Increasing the money supply. c. engage in open market sales of government securities. Which of the following is likely to occur if OPEC increases the amount of oil it supplies and domestic energy prices fall, ceteris paribus? Suppose further that the required reserve, Explain briefly: a. B. buys treasury securities decreasing i, To stop rampant inflation, the Fed decides to sell $400 billion worth of government bonds and other securities to banks, thus decreasing the banks' reserves. Figure 14.10c depicts the aggregate investment function of an economy. When the Federal Reserve makes an open market purchase, the Fed: buys securities from banks and the public, which will decrease tha. B. federal bond operations. b. money demand increases and the price level decreases. Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page. If the economy is currently in monetary equilibrium, an increase in the money supply will a. __ Money paid to stockholders from earnings of a corporation. raise the discount rate. The nominal interest rates falls. }\\ Suppose the banks in the Federal Reserve System have $400 million in transactions accounts and the reserve requirement is 0.10. C. increase the supply of bonds, If the money supply increases, what happens in the money market (assuming money demand is downward sloping)? b. The Treasury buys bonds in the open market c. The Fed reduces reserve requirements d. The Treasury sells b. B. decrease by $200 million. Which of the following lends reserves to private banks? $$ Suppose the Federal Reserve decided to sell $35 billion worth of government securities in the open market. D. $100,000 in checkable-deposit liabilities and $30,000 in reserves. The Federal Reserve cut interest rates on March 3, 2020, in response to COVID-19. \end{array} If you knew the answer, click the green Know box. a. increases, increase, increase b. increases, increase, decrease c. decreases, increase, decrease d. increases, decrease, increa, If the Federal Reserve increases the discount rate, how are interest rates and real GDP affected? Is this an example of fiscal policy or monetary policy? When the Fed buys bonds in open-market operations, it _____ the money supply. c. buys bonds from ban, The Federal Reserve's sale or purchase of government bonds is referred to as: a. open market operations b. credit rationing c. quantitative easing d. monetarism, If the Fed wants to increase the money supply through an open market operation, it will a. purchase government securities. \text{Expenses:}\\ B) means by which the Fed acts as the government's banker. The answer is b. rate of interest decreases. b) an increase in the money supply and a decrease in the interest rate. Our experts can answer your tough homework and study questions. increase; decrease decrease; decrease increase; increase decrease; increas. a-Ceteris paribus, an increase in the interest rate would lead to a fall in investment due to an inward shift of the investment line. Your email address is only used to allow you to reset your password. If the Federal Reserve increases the rate of money growth and maintains it at the new higher rate, eventually expected inflation will and the short-run Phillips curve will shift. d. Conduct open market sales. It improves aggregate demand, thus increasing the country's GDP. Therefore the correct option is b: If the Federal Reserve increases the money supply, ceteris paribus, the rate of interest decreases. Suppose that the sellers of government securities deposit the checks drawn on the New York Fed into their bank account. c. the money supply divided by nominal GDP. Raise the reserve requirement, raise the discount rate or sell bonds Ceteris paribus, if the Fed reduces the discount rate, then: The incentive to borrow funds increases The use of money and credit controls to change macroeconomic activity is known as: Monetary policy B. fewer reserves and inc, Suppose you read in the paper that the Fed plans to reduce money supply. This is an example of: Money is functioning as a medium of exchange when you: Buy lunch at a fast food restaurant for yourself and your friend. They will increase. Explore how the Federal Reserve uses monetary policies to control the money supply and affect interest rates in an effort to prevent another depression from occuring. When the Fed raises the reserve requirement, it's executing contractionary policy. Privacy Policy and &\textbf{0-30 days}&\textbf{31-90 days}&\textbf{Over 90 days}\\ These actions can be classified as expansionary or contractionary, depending on the prevailing market conditions. a. then the Fed. In order to increase sales by one item per month, the monopolist must lower the price of its software by $1 to $49. During the year, the company started and completed 45 motor homes at a cost of $\$ 55,000$ per unit. b. buys bonds from banks, which increases bank reserves. lower reserve requirements.I and III onlyCurrently the Fed sets monetary policy by targetingthe Fed funds rate From October 1983 . c. an increase in the quantity of money demanded. Given an inflationary gap, the Federal Reserve will use monetary policy to do what to interest rates and to aggregate demand? \text{U.S. income tax rate on the U.S. division's operating income} & \text{40\\\%}\\ c. Increase the interest rate paid on ban, Which of the following describes what the Federal Reserve would do to pursue an expansionary monetary policy? d. the money supply is not likely to change. . If the Federal Reserve raises interest rates, it means the money supply starts to deplete. a. decrease; decrease; decrease b. The Fed's decision amounted to a shift to a more cautious period of inflation fighting. \text{Selling expenses} \ldots & 500,000 The supply of money increases when: a. the value of money increases. The paper argues that the process of financialization has profoundly changed how capitalist economies operate. c) not change. a- raises and reduces b- lowers and increases c- raises and increases d- lowers and reduces, When the Federal Reserve uses contractionary monetary policy to reduce inflation, it: A. sells treasury securities increasing interest rates, leading to a stronger dollar that lowers net exports in an open economy. c. the money supply and the price level would increase. It needs to balance economic growth. If the required reserve ratio is 10 percent, what is the resulting change in checkable deposits (or the money supply) if we assume no cash leakages and banks hold zero excess res. If a bank does not have enough reserves, it can. Ceteris paribus, if the Fed raises the reserve requirement, then Most studied answer the lending capacity of the banking system decreases. The equilibrium price level and equilibrium output should both increase. Suppose the Federal Reserve buys government securities from the nonbank public. $$ Suppose the Federal Reserve buys 100 mortgage-backed securities in the open market. \text{Percent uncollectible}&\text{8\\\%}&\text{17\\\%}&\text{31\\\%}\\ \text{Selling price (net of marketing and distribution costs) in France} & \text{\$300}\\ An open market operation is ____?A. The following is the past-due category information for outstanding receivable debt for 2019. How does the Federal Reserve regulate the money supply? }\\ B. When the Fed buys government bonds, the reserve of the banking system: a) increases, so the money supply increases. - By buying and selling bonds through open-market operations - By buying and selling stocks - By setting the interes, Suppose the Fed decided to purchase $100 billion worth of government securities in the open market, directly deposited into the banking system. As a result, the money supply will: a. increase by $1 billion. C. treasury bond operations. If there is a recession, the Fed would most likely a. encourage banks to provide loans by. e. increase inflation. C. where a bank borrows reserves or bo, Open market operations are a) buying and selling of Federal Reserve Notes in the open market. Consider an open market purchase by the Fed of $16 billion of Treasury bonds. Fill in either rise/fall or increase/decrease. Free . \text{Direct materials used} \ldots & \$ 750,000\\ d. raise the treasury bill rate. \text{Percent uncollectible}&\text{8\\\%}&\text{17\\\%}&\text{31\\\%}\\ The text describes the theoretical developments of the assignment rules regarding fiscal and monetary policies and the respective roles in macroeconomics stabilisation. Using the oversimplified money multiplier, the money suppl, Assume the reserve requirement is 10%. 26. An easing of monetary policy interest rates, which the demand for a currency and the fundamental value of the exchange rate. Currency circulation in the economy will increase since the non-bank public will have sold their securities. The purchase and sale of government bonds by the Fed for the purpose of altering bank reserves is referred to as: Members of the Federal Reserve Board of Governors are appointed for one fourteen-year term so that they: Make their decisions based on economic, rather than political, considerations. C) Excess reserves increase. Fill in either rise/fall or increase/decrease. a. The information provided should help you work out why you missed a question or three! Banks now have more money to loan since they are required to hold less in reserve. (Income taxes are not included in the computation of the cost-based transfer prices.) b. D.bond prices will rise, and interest rates will fall. b. means by which the Fed supplies the economy with currency. Suppose the banks in the Federal Reserve System have $400 million in transactions accounts and the reserve requirement is 0.10. a. monetary base b. Total deposits decrease. While those goals were articulated in 1977, 2 the approach and tools used to implement those objectives have changed over time. International Financial Advisor. a) 0.25 b) 0, Suppose the reserve requirement for checking deposits is 10 percent and banks do not hold any excess reserves. What happens to interest rates? The Fed decides that it wants to expand the money supply by $40 million. The total change in deposits (with no drains) would be$12,857 million = (1/0.07) $900 million If the Fed wishes to stimulate the economy, it could I. buy U.S. government securities.II. Ceteris paribus, if the Fed reduces the reserve requirement, then, the lending capacity of the banking system increases, Ceteris paribus, if the Fed reduces the discount rate, then. Road Warrior Corporation began operations early in the current year, building luxury motor homes. C. The lending capacity of the banking system increases. Expansionary fiscal policy: a) decreases the money supply and raises interest rates. The Fed approved a 0.25 percentage point rate hike, the first increase since December 2018. $$ Excess reserves increase. FROM THE STUDY SET b. b-A rise in corporate tax would shift the investment line outwards. If the Fed is using open-market operations, An open market operation is a purchase or sale of ___ by the ___ in the open market. &\textbf{0-60 days}&\textbf{61-120 days}&\textbf{Over 120 days}\\ \end{array} a. \text{Full manufacturing cost per chainsaw} & \text{\$175}\\ C. increase by $50 million. Interest rates b. This problem has been solved! In addition, the company had six partially completed units in its factory at year-end. Conduct open market sales of government bonds. d. lower reserve requirements. Suppose the Federal Reserve wishes to use monetary policy to close an expansionary gap. d. buying and selling of government, 1) Open market operations are the: A) buying and selling of Federal Reserve Notes in the open market. C. decreases, 1. d. the average number of times per year a dollar is spent. Ceteris paribus, what will occur if the Fed buys bonds through open-market operations? Working Paper No. If the required reserve ratio is nine percent, what is the resulting change in checkable deposits (or the money supply) if we assume there are no. c. means by which the Fed acts as the government's banker. \text{Bad Debt Expense}&\text{\hspace{12pt}?}&\text{\hspace{12pt}? a. U.S.incometaxrateontheU.S.divisionsoperatingincomeFrenchincometaxrateontheFrenchdivisionsoperatingincomeFrenchimportdutyVariablemanufacturingcostperchainsawFullmanufacturingcostperchainsawSellingprice(netofmarketinganddistributioncosts)inFrance40%45%20%$100$175$300. If the Federal Reserve System buys government securities from commercial banks and the public: a. the money supply will contract. According to the monetarist view, the aggregate supply curve is: Vertical at the natural rate of unemployment. D. Decrease the supply of money. Over the 30-year life of the. Remember that the transfer price must be between the full manufacturing cost per unit of $175 and the market price of$250 of comparable imports into France. c) borrow less from the Fed and, If Federal Reserve decides to decrease the money supply in the United States, what will happen to: 1) the interest rate 2) the level of investment spending in America 3) the level of GDP 4) the level of money demand 3) the U.S interest rate 4) the level o. Then the bank can make new loans in the amount of: Initially a bank has a minimum reserve requirement of 15 percent and no excess reserves. Cause the money supply to decrease, b. If the Fed sells bonds: A.aggregate demand will increase. It sells $20 billion in U.S. securities. Is it mandatory for banks to buy gov't bonds during open-market operations by the Central Bank? d) setting interest r, Suppose the Federal Reserve sells $30 million worth of securities to a bank. An open market operation decreases the money supply when the Federal Reserve a. sells bonds to banks, which increases bank reserves. Michael Haines Hence C is the correct option. A. decreases; decreases B. decreases; increases C. increases; decreases D. increases. If there is an adverse supply shock and the Federal Reserve responds by increasing the growth rate of the money supply, then in the short run the Federal Reserve's action: a. lowers both inflation and unemployment b. lowers inflation but raises unemployme, A sale of bonds by the Fed generates a. a decrease in the demand for money balances. When the Federal Reserve increases the discount rate, banks will borrow A. fewer reserves and decrease lending. Q02 . The Burton Company manufactures chainsaws at its plant in Sandusky, Ohio. If the rate of inflation is constant at 10 percent, in order to keep Patricia's real income constant, her nominal income in the year 2010 should be: The value of a painting, held as an asset, increased in value by 100 percent from 1970 -2010. The various quantities of output that all market participants are willing and able to buy at alternative price levels in a given time period is: Ceteris paribus, based on the aggregate demand curve, if the price level _______ the quantity of real output _______ increases. 3. Ceteris paribus, if the Fed raises the reserve requirement, then: The lending capacity of the banking system decreases. a. increase the supply of money by buying bonds b. increase the supply of money by selling bonds c. increase the demand for money by buying bonds d. increase the demand for mo, An increase in the money supply will cause interest rates to: a. rise b. fall c. remain unchanged. Facility location decisions are significant for an organization because:? The change in total revenue that results from a one-unit increase in quantity sold is: For a monopolist, after the first unit of output, marginal revenue is always: Suppose a monopoly firm produces software and can sell 10 items per month at a price of $50 each. Assume the required reserve ratio is 10 percent and the FOMC orders an open market sale of $50 million in government securities to banks. d. The Federal Reserve sells bonds on the open marke, If the Fed purchases government securities on the open market, the quantity of money and the nominal interest rate. b. buys or sells foreign currency. $$ When the Federal Reserve Bank buys US Treasury bonds on the open market, then _______. }\\ b. raises the cost of borrowing from the Fed, discouraging banks from making loans, When the Fed conducts open-market purchases, a. it buys Treasury securities, which increases the money supply. Ceteris paribus, if the Fed raises the reserve requirement, then: The lending capacity of the banking system decreases. A Burton marketing division in Lille, France, imports 200,000 chainsaws annually from the United States. To decrease the money supply the Fed can: Raise the reserve requirement, raise the discount rate, or sell bonds. We develop a model of price formation in a dealership market where monitoring of the information flow requires costly effort. Suppose the economy is initially experiencing an inflationary gap. What effect will this open market operation have on demand deposits and M1? Then the bank has excess reserves of: Suppose a bank has $1,000,000 in deposits, a minimum reserve requirement of 15 percent, and bank reserves of $170,000. CBDC Next-Level: A New Architecture for Financial "Super-Stability" by. Suppose that banks are able to issue private IOU's, such that individuals deposit goods with the bank and the bank can promise a return on the deposit. 23. \end{array} The number of deposit dollars the banking system can create from $1 of excess reserves. It creates money, it creates a transactions-account balance for the borrower, and the money supply increases. Then, ceteris paribus, bank reserves _____ (increase, decrease, or do not change), currency in circulation _____ (increases, decreases, or does not change), and thus the monetary base will _____ (decrease or increase). The number and relative size of firms in an industry. See our Increase the reserve requirement C. Buy government securities D. Decrease the discount rate, When the Fed successfully decreases the money supply, GDP options: a. increases because the resulting increase in the interest rate leads to a decrease in investment b. increases because the resul, If the Fed wants to raise the interest rate, in the short run in the money market, the Fed: a) decreases the quantity of money b) increases the quantity of money c) shifts the demand for money curve leftward d) shifts the demand for money curve rightward, The Federal Reserve is becoming more cautious about rising inflationary pressure. The required reserve. B.bond prices will fall, and interest rates will fall. d) Lowering the real interest rate. C. excess reserves at commercial banks will increase. 2) If, If the Fed increases the supply of money in the market, bond prices will and interest rates will. What is Wave Waters debt ratio on this date? (a) the money supply decreases, interest rates decline, GDP increases, and employment decreases (b) the money supply increases, interest rates increase, GDP decreases, 1) The Federal Reserve will lower short-run output by: a) Decreasing the money supply. The result is that people _____. \begin{array}{l r} Q01 . The Board of Governors has___ members, and they are appointed for ___year terms. The Fed has most likely reduced the, If the Fed wishes to increase the money supply it can, If the Fed wishes to decrease the money supply it can, The rate of interest banks charge each other for lending reserves is the, A change in the reserve requirement is the tool used least often by the Fed because it, can cause abrupt changes in the money supply, consists of seven members appointed by the President of the United States, who together act as the key decision-making entity for monetary policy, Bank reserves in excess of required reserves, Ceteris paribus, if the Fed raises the discount rate, then, the incentive to borrow reserves decreases. The Federal Reserve's monetary policy is one of the ways in which the U.S. government tries to regulate the nation's economy by controlling the money supply. Which of the following is consistent with what Keynes believed? Lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public. Now suppose the Fed lowers. Suppose the Fed conducts $10 million open market purchase from Bank A. Ceteris paribus, if the reserve requirement is decreased to 0.05, then excess reserves will . Price charged is always less than marginal revenue. Issuanceofstock.Cashdividends.Balance,December31,2012.$3ParCommonStock$375120AdditionalPaid-inCapital$2,225240RetainedEarnings$4,200990(69)AccumulatedOtherComprehensiveIncome$123TotalShareholdersEquity$6,812. Suppose the Federal Reserve buys government securities from the non-bank public. \text{Accounts receivable amount}&\text{\$\hspace{1pt}263,000}&\text{\$\hspace{1pt}134,200}&\text{\$\hspace{1pt}64,200}\\ What is the reserve-deposit ratio? This type of market is called: As the economy falls from the peak to the trough of the business cycle: Cyclical unemployment should increase and real GDP should decline. c. Purchase government bonds on the open market. If the population of a country is 1,000,000 people, its labor force consists of 600,000, and 60,000 people are unemployed, the unemployment rate is: If the population of a country is 220 million people, its labor force consists of 115 million, and 99 million people are employed, the unemployment rate is: When construction workers seek work because the ground is covered in snow and ice, the unemployment rate goes up.