• 1. The relationship between income and consumption is ___________.

A. positive

B. inverse

C. constant

D. None of the above

• 2. Which of the followings is not a role of the bond market?

A. Channels funds from savers to borrowers

B. Change the reserve ratio requirement

C. Create liquidity

D. Funds government debt

• 3. Suppose the U.S. imposes a 20% tariff on cars imported from China. How would this affect Chinese Yuan?

A. Chinese Yuan will appreciate against the U.S. dollars.

B. Chinese Yuan will deppreciate against the U.S. dollars.

C. The exchange rate between the U.S. dollars and Yuan will remain unchanged.

D. None of the above

• 4. Would this affect Chinese Yuan? Suppose Toyota will generate $500,000 revenue in its first year, and the real interest rate is 14%., and depreciation rate is 11%. What is the present value of a stream of payments?

A. $1 million

B. $1.5 million

C. $2 million

D. $2.5 million

• 5. An increase in saving would shift ____________ to the ________.

A. the demand curve for loanable funds, left

B. the demand curve for loanable funds, right

C. the supply curve of loanable funds, right

D. the supply curve of loanable funds, left

• 6. Suppose there is a growing demand for trips to France among people in the U.S. How would this affect Euros?

A. Euros will appreciate against the U.S. dollars

B. Euros will depreciate against the U.S. dollars

C. The exchange rate between the U.S. dollars and Euros will remain unchanged.

D. None of the above

• 7. Which of the followings is not one of factors that shift the demand for loanable funds?

A. future expectations about prices

B. future shock about oil supply

C. case reserves

D. technological improvements

• 8. Suppose the relative value of the U.S. dollars becomes stronger than other countries in 2020. How would that affect net exports?

A. Net exports would decline

B. Net exports would rise

C. Net exports would remain unchanged

D. None of the above

• 9. The stock market can help forecast economic changes or fluctuations in the future
• True
• False
• 10. Shadow banks are financial companies that are similar to the Federal Reserves. Also, it is governed by the IMF.
• True
• False