(1.) Which of the following statements is true?

• a.)
• A price floor is binding when it is placed above equilibrium.
• b.)
• A price ceiling is when the minimum wage is higher than the prevailing market wage.
• c.)
• A price floor happens when the market clears.
• d.)
• A price ceiling creates surplus when it is binding.

(2.) Binding price floors will __________.

• a.)
• transfer some surplus from producers to consumers
• b.)
• benefit all producers in the market
• c.)
• make additional total surplus in the market
• d.)
• transfer some surplus from consumers to producers

(3.) In which of the following ways do subsidies differ from taxes in relation to measuring their impact?

• a.)
• With subsidies, demand is more elastic, so that means that producers benefit more than consumers.
• b.)
• We measure the impact of a subsidy in terms of who benefits from it.
• c.)
• With subsidies, consumers benefit more than producers.
• d.)
• We measure the impact of a subsidy in terms of who pays for it.

(4.) Which of the statements about aggregate demand is true?

• a.)
• The Wealth Effect causes a decrease in consumption as prices fall.
• b.)
• Interest rates have no effect on aggregate demand.
• c.)
• AD represents the downward sloping relationship between price level and RGDP.
• d.)
• The exchange rate has no effect on aggregate demand.

(5.)

Which statement below is NOT true about the LRAS?

• a.)
• An outward shift in LRAS will occur at the same rate as growth in the economy.
• b.)
• The LRAS represents the maximum output level an economy can sustain given its current resources.
• c.)
• The LRAS will shift outward if resources allow for a higher sustainable output level.
• d.)
• The LRAS remains fixed over time.

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(6.) What does a graph that depicts a situation in which expansionary economic policies might be necessary look like?

(7.) When I use money to purchase a movie ticket, my dollars are acting as a __________.

• a.)
• medium of exchange
• b.)
• bartering agreement
• c.)
• store of value
• d.)
• unit of account

(8.) Which of the followingchoices is a reason why gold became a form of currency?

• a.)
• It has little practical value.
• b.)
• It is almost impossible to counterfeit.
• c.)
• It contributes to inflation.
• d.)
• It is the most liquid form of money.

(9.) Which of the following can be described aswhen a bank holds a part of its gold and loans out the rest?

• a.)
• Deposit account
• b.)
• Fiduciary money
• c.)
• Fiat currency
• d.)
• Fractional reserve

(10.) Some of the founding fathers were initially against a Central Bank because __________.

• a.)
• the 'Continental' currency had already been issued
• b.)
• the control of the English bank over the colonies
• c.)
• different states wanted their own currency
• d.)
• they couldn't agree which branch of government would control a Central Bank

(11.) Which of the following statements regarding central banks is true?

• a.)
• A run could never happen at a central bank.
• b.)
• Banks are not required to maintain cash on hand.
• c.)
• A central bank is charged with the regulation of money supply and interest rates.
• d.)
• As the value of the currency becomes more certain, people rely more on commodity standards.

(12.) Which of the followingstatements is NOT true of the Federal Reserve?

• a.)
• The Federal Reserve prevents panics by allowing private banks to hold reserves at regional Federal Reserve banks.
• b.)
• The Federal Reserve prints more money to prevent runs on banks.
• c.)
• The Federal Reserve was created to sustain long term economic health.
• d.)
• The Federal Reserve is independent from the federal government.