Question 1

Which statement about the loanable funds market is NOT correct?

a.The market suppliers are the savers and the buyers are the borrowers.

b.The price of loanable funds is the real interest rate.

c. Loanable funds are provided by savers to borrowers to spend on investment goods and services.

d.The loanable funds theory describes changes in short-term interest rates.

Question 2

All of these cause a change in supply except

Question 2 options:

a. prices of inputs

b. expected future prices

c. extent of competition in the market

d. the current price of the product.

Question 3

Which of the following is an example of variable costs for a business?

Question 3 options:

a.hourly wages.

b. cost ofbusiness licenses.

c. cost of purchasing a business vehicle.

d. rent.

Question 4

Which statement does NOT correctly describe bonds?

a. Municipal bonds are used by state and local governments to finance school, roads and other public projects.

b.A one-year T-bill with a face value of $1000 and offered at $900 yields an interest rate of 11.1 percent.

c.U.S. treasury notes have maturities that range from 2 to 10 years whereas U.S. treasury bonds have maturities of 30 years.

d.Corporate bonds are usually issued at a lower rate of interest than government bonds because of their lower risk of default.

Question 5

The price of bonds and the interest rate are

a.not related.

b. positively related.

c. negatively related.

d. sometimes positively related and other times negatively related, depending on the bond payments.

Question 6 (1 point)

A price ceiling on items like apartment rents or meat is likely to lead to

a.Supply exceeding demand.

b.An increase in production.

c.Demand exceeding supply.

d.A decrease in demand.

Question 7

Which of the following is an example of diminishing marginal utility?

a. You give up donuts on your diet.

b.You like one donut with your coffee, but not two.

c.You buy more donuts when the price of coffee rises.

d.You cut back on donuts after your pay cut.

Question 8 (1 point)

Which of the following is NOT an example of a demand shift?

a. A salary increase at her job leads the employee to increase spending on vacation travel.

b. A shoe store sale leads to higher demand for its shoes.

c. A safety recall of the Honda Prius leads to lower demand for the Honda Civic.

d. An increase in the price of lattes leads to an increase in demand for tea.

Question 9 (1 point)

Which situation describes the increasing returns stage of the production function?

a.Hiring one more tailor results in three more suits produced per hour.

b. Hiring one more baker results in less than one oven available per baker.

c.Buying one more office computer causes there to be more computers than workers.

d.Extending the workday results in more tired and less productive workers.

Question 10 (1 point)

Liquidity preference is

a is the demand for goods and services that can be easily sold for cash.

b is the demand for holding cash money rather than bonds or other assets.

c. increases when interest rates rise.

d.causes interest rates to rise when liquidity preference falls.

Question 11 (1 point)

Price discrimination is a situation where a producer

a.charges different prices in different markets.

b.charges the same price in different markets.

c.colludes with other companies on settingthe sameprice in all markets.

d. All of the above.

Question 12 (1 point)

An example of a contractionary monetary policy is

a.an decrease in the required reserve ratio.

b. a reduction in the interest banks receive on their reserves.

c. a decrease in the discount rate.

d. the Fed selling government securities in the open market.

Question 13 (1 point)

CPI is measured as the change in

a.The prices of the basket of consumer goods and services, excluding volatile food and energy prices.

b.The prices of goods and services purchased by producers and consumers.

c.The prices of consumer goods and services that are produced in the country.

d.The prices of the entire basket of consumers' purchases of goods and services.

Question 14 (1 point)

The U.S. dollar has

a A fixed exchange rate.

b. A fixed purchasing power parity.

c. A fixed, overvalued exchange rate.

d. a floating exchange rate.

Question 15 (1 point)

Margarine and butter can both be used as a spread on toast.This means that they are:

a. complements.

b. substitutes.

c. inferior goods.

d. none of the above.

Question 16 (1 point)

An expansionary fiscal policy is when

a. the government lowers spending and raises taxes.

b. the Federal Reserve buys bonds on the open market.

c. the government increases spending and lowers taxes.

d. The Federal Reserve sells bonds on the open market.

Question 17 (1 point)

Which of the following is an example of a non-rival and non-excludable good?

a.A movie ticket

b.A public highway

c.A free cookie at the bakery

d.A private petting zoo

Question 18 (1 point)

The law of demand states that

a.with an increase in the price, the quantity demanded increases.

b.with an increase in the price, the quantity demanded decreases.

c.with an increase in price, demand falls.

d.with an increase in price, demand rises.

Question 19 (1 point)

Demand-pull inflation is

a.caused by a shock to supply, such as a crop failure.

b.caused by price manipulation by cartels.

c. caused by an expansionary monetary policy.

d.caused by high unemployment.

Question 20 (1 point)

Which of the following describes the short-run time production period?

Firms can vary only one of the inputs in the production process.

Firms can vary all inputs into the production process.

Firms cannot vary any of the inputs into the production process.

Firms can choose to go out of business.