Question 11

1. What is the purpose of the financial system?
2. A. Match one person's savings to another person's investing
3. B. Ensure that everyone in society has no less than a certain minimum amount of money
4. C. Transport money from one location to another
5. D. Fund capital projects for businesses

2 points

Question 12

1. Which of the following is a financial market?
2. A. Federal Reserve
3. B. NASDAQ
4. C. Bank of Japan
5. D. Edward Jones mutual funds

2 points

Question 13

1. Which of the following are financial intermediaries?
2. A. NASDAQ
3. B. Your local bank
4. C. Nikkei Stock Exchange
5. D. NYSE

2 points

Question 14

1. Which of the following proverbs best expresses the principle of diversification?
2. A. "Don't count your chickens before they are hatched."
3. B. "Don't put all your eggs in one basket."
4. C. "You can lead a horse to water, but you can't make him drink."
5. D. "Better a meal of vegetables with love than a fatted calf served with hatred."

2 points

Question 15

1. Use the following data to answer questions 15-18. It will be repeated at the beginning of each question.
3. Econville has 100 million adult citizens. Of these, there are 40 million full-time workers and 20 million part-time workers. There are 2.5 million people currently seeking jobs and 500,000 that have been laid off from their jobs and not yet recalled to work. There are 18 million full-time students that aren't working, 11 million homemakers that aren't working, 7.5 million retirees. There are also 500,000 people who gave up trying to find a job.
5. What is Econville's unemployment rate?
6. A. 4%
7. B. 4.76%
8. C. 5%
9. D. 25.93%

2 points

Question 16

1. Econville has 100 million adult citizens. Of these, there are 40 million full-time workers and 20 million part-time workers. There are 2.5 million people currently seeking jobs and 500,000 that have been laid off from their jobs and not yet recalled to work. There are 18 million full-time students that aren't working, 11 million homemakers that aren't working, 7.5 million retirees. There are also 500,000 people who gave up trying to find a job.
3. What is Econville's labor-force participation rate?
4. A. 60%
5. B. 63%
6. C. 81%
7. D. 81.5%

2 points

Question 17

1. Econville has 100 million adult citizens. Of these, there are 40 million full-time workers and 20 million part-time workers. There are 2.5 million people currently seeking jobs and 500,000 that have been laid off from their jobs and not yet recalled to work. There are 18 million full-time students that aren't working, 11 million homemakers that aren't working, 7.5 million retirees. There are also 500,000 people who gave up trying to find a job.
3. How many discouraged workers does Econville have?
4. A. 500,000
5. B. 1,000,000
6. C. 3,500,000
7. D. 23,500,000

2 points

Question 18

1. Econville has 100 million adult citizens. Of these, there are 40 million full-time workers and 20 million part-time workers. There are 2.5 million people currently seeking jobs and 500,000 that have been laid off from their jobs and not yet recalled to work. There are 18 million full-time students that aren't working, 11 million homemakers that aren't working, 7.5 million retirees. There are also 500,000 people who gave up trying to find a job.
3. Suppose all 500,000 of the laid off workers are recalled to their jobs. What effect would that have on the unemployment rate and labor-force participation rate?
4. A. Unemployment rate remains the same; labor-force participation rate increases.
5. B. Unemployment rate decreases; labor-force participation rate remains the same.
6. C. Unemployment rate decreases; labor-force participation rate decreases.
7. D. Unemployment rate decreases; labor-force participation rate increases.

2 points

Question 19

1. If the government runs a budget deficit, what would happen to the market for loanable funds?
2. A. Demand increases
3. B. Demand decreases
4. C. Supply increases
5. D. Supply decreases

2 points

Question 20

1. If the government offers a tax credit to businesses building new physical capital, what would happen to the market for loanable funds?
2. A. Demand increases
3. B. Demand decreases
4. C. Supply increases
5. D. Supply decreases