1. Assume that an economy has a GDP multiplier of 10. What is their marginal propensity to consume?

0.90

0.80

0.50

0.10

2. Suppose the Fed wants to conduct expansionary policy. Which of the following would they choose to do?

Increase income taxes

Sell treasury securities

Buy treasury securities

Decrease income taxes

3. Becca's Bakery is expanding and want to raise money to build a second location. All of the following are options for how the bakery can get additional funding. Which of the following is a financial investment that represents partial ownership of a company?

Becca's Bakery gets a loan from the bank to start a new location.

Becca's Bakery issues new bonds that they sell to the public.

Becca's Bakery issues stock and sells shares to investors.

Becca's Bakery gets stimulus funding through the CARES act.