What is the relationship between someones marginal propensity to consume and taxes? 7. Name and elaborate on two components of low interest rates that causes consumers to have a higher demand for money? 8. What may be the opportunity cost from holding your money with a bank in their checking account versus a savings or CD account? 9. In one of our assignments we calculated possible returns from investment vehicles offered by our banks. Until recently, we had historically low interest rates. Even at the current rates which are significantly higher than past decades inflation is greater than the returns offered through our banks. How will inflation affect our returns at the end of the year? 10. How does inflation help us pay off our debt over time? 11. Name three variables that affect insurance premiums? Calculating the right amount of premiums will help insurance companies generate profits. What is another way insurance companies generate profits? 12. Consider the following formula for future value: F V = P V (1 + r) n Given the following inputs, what is the future value? Present Value = $11,456 rate = 20.99% Time = 3 years (annual compounding) Compound = Annual. 13. Explain what a loan-to-value ratio is? If the maximum loan-to-value ratio that a lender will accept on a $100,000 home is 80 percent, what is the minimum down payment the borrower must make? 14. Describe how the Economy works like a machine. In that framework, What are the the important lessons to take away from this course for your own life and economic planning?