QUESTION 1

Opportunity cost is the value of the next-best alternative that is given up as a result of making a particular choice.

True

False

QUESTION 2

A decrease in supply causes the price to fall and the quantity traded to increase.

True

False

QUESTION 4

Aggregate demand is the total quantity of final goods and services that consumers, businesses, government and those living outside the country would buy at various different price levels.

True

False

QUESTION 5

An increase in wage rates will cause an increase in both Real GDP and the price level

True

False

QUESTION 6

Which one of the following is not an economic benefit provided by depository institutions?

lowering the cost of borrowing

providing a place for reserve account deposits

creating liquidity

lowering the cost of monitoring borrowers

pooling risk