Question

5.

In the market for loanable funds, what can cause a rise in interest rates?

	supply shifting right and demand shifting right
	demand shifting right only
	supply shifting left and demand shifting right
	supply shifting right only

6.

Which of these is an example of money being used as a store of value?

	A restaurant sells a large ice cream sundae and charges the customer's debit card.
	A customer receives $3.05 in change and returns the next day to make another purchase.
	A restaurant's profits for the week of October 3 to October 10 are $1,250.
	A customer buys a burger, fries, and a medium diet cola for $6.95.

7.

Which of the following is NOT true about the Fed's Board of Governors?

	Members of the Board of Governors serve one 14-year term.
	Members of the Board of Governors are elected by voters in the region they serve.
	There are seven members of the Board of Governors.
	The Board of Governors is located in Washington, D.C.

8.

Which of these would be the lowest interest rate?

	discount rate
	30-year mortgage rate
	prime rate
	federal funds rate

9.

A shift of the long-run aggregate supply curve to the right suggests which of the following?

	a decrease in the average standard of living
	an increase in tax revenue
	an increase in productivity
	a decrease in economic growth

10.

With the power of compounding, a $500 deposit in a savings account that earns 3% interest per year will earn how much in total interest after 10 years?

	less than 15%
	exactly 30%
	between 15% and 30%
	more than 30%

11.

Barter as a system tends to work only:

	among large, multinational corporations.
	when agricultural products are exchanged.
	in primitive economies with little product variety.
	in small U.S. towns and villages.

12.

If MPC = 0.6, what is the spending multiplier?

	2.5
	4
	6
	1.66

13.

Suppose the government collected $3.2 trillion in tax revenues and spent $3.8 trillion, and discretionary spending was $1.5 trillion. For the government to fully balance the budget this year, how much discretionary spending needs to be cut?

	10%
	30%
	40%
	20%

14.

If a government collects $550 billion in taxes and spends $700 billion, it would have a:

	deficit of $1,250 billion.
	deficit of $150 billion.
	surplus of $1,250 billion.
	surplus of $150 billion.

15.

Which one of the following is a reason the crowding-out effect could be mitigated?

	an increase in the saving rate
	a decrease in tax revenues
	an increase in consumer consumption
	deficit spending used for public investment

Answer 1

5.
supply shifting left and demand shifting right supply
shifting left or demand shifting right will cause the rise in interest rate. Supply shifting left means less supply of loanable fund, which will increase the competition among investor, resulting to rise in interest rate.
6.
A customer receives $3.05 in change and returns the next day to make another purchase
The store of money function of money is that money can be used at a later point in time and is still useful.
7.
Members of the Board of Governors are elected by voters in the region they serve.
They are nominated by President and confirmed by the Senate.
8.
federal funds rate
Discount Rate (Currently 2.25%)
Federal Funds Rate (Currently 1.75 %)
Prime Rate (Currently 3.75%)
30-year mortgage rate(currently 4.37%)