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Question 1 (1 point)

As the interest rate falls, people hold ________ money instead of bonds because the opportunity cost of holding money has ________.

Question 1 options:

	a.more; fallen.
	b.more; risen.
	c. less; fallen.
	d less; risen.

Question 2 (1 point)

Which statement does NOT correctly describe bonds?

Question 2 options:

	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 3 (1 point)

Which of the following is explained by the price elasticity of demand?

Question 3 options:

	a. The effect of price changes on supply.
	b. The effect of price changes on the quantity supplied.
	c. The effect of price changes on demand.
	d. The effect of price changes on the quantity demanded.

Question 4 (1 point)

Which of the following describes the inflation-unemployment trade off?

Question 4 options:

	a.Monetary policies that expand the money supply and lower interest rates will lower inflation and unemployment.
	b.Monetary policies that expand the money supply and raise interest rates will lower inflation and unemployment.
	c.Fiscal policies that increase government spending and lower unemployment will cause inflation.
	d.Fiscal policies that increase government spending and lower unemployment will lower inflation.

Question 5 (1 point)

Allocative efficiency means that

Question 5 options:

	a. Consumers get the most goods at the lowest prices possible.
	b. Production reaches consumers on time.
	c. A small number of sellers coordinate products and prices.
	d. Government lowers taxes.

Question 6 (1 point)

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

Question 6 options:

	a. Supply exceeding demand.
	b. An increase in production.
	c. Demand exceeding supply.
	d. A decrease in demand.

Question 7 (1 point)

Select the correct statement about fiat money.

Question 7 options:

	a. Fiat money is tied to a fixed quantity of gold and therefore protects against inflation.
	b.Fiat money eliminates the need for monetary policy and the Federal Reserve?s role in managing the money supply.
	c.All fiat money is a type of soft currency that trades only within the issuing country.
	d.The U.S. dollar is fiat money.

Question 8 (1 point)

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

Question 8 options:

	a.hourly wages.
	b. cost of business licenses.
	c. cost of purchasing a business vehicle.
	d. rent.

Question 9 (1 point)

CPI is measured as the change in

Question 9 options:

	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 10 (1 point)

Which statement about the loanable funds market is NOT correct?

Question 10 options:

	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 11 (1 point)

Which is an example of the subsitution effect on demand?

Question 11 options:

	a. the price of coffee rises, so you buy less coffee.
	b. The price of coffee rises, so you buy more coffee.
	c. the price of coffee rises, so you buy more tea and less coffee.
	d. the price of coffee rises, but you buy the same amount of coffee.

Question 12 (1 point)

The U.S. dollar has

Question 12 options:

	a A fixed exchange rate.
	b. A fixed purchasing power parity.
	c. A fixed, overvalued exchange rate.
	d. a floating exchange rate.

Question 13 (1 point)

The law of demand states that

Question 13 options:

	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 14 (1 point)

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

Question 14 options:

	a. complements.
	b. substitutes.
	c. inferior goods.
	d. none of the above.

Question 15 (1 point)

Which of the following items would NOT be included in GDP?

Question 15 options:

	a. The purchase of an historic Victorian home.
	b. The export of US wheat.
	c. The import of French wine.
	d. Dividend income from a savings account.

Question 16 (1 point)

Price discrimination is a situation where a producer

Question 16 options:

	a.charges different prices in different markets.
	b.charges the same price in different markets.
	c.colludes with other companies on settingthe same price in all markets.
	d. All of the above.

Question 17 (1 point)

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

Question 17 options:

	a. A movie ticket
	b. A public highway
	c. A free cookie at the bakery
	d. A private petting zoo

Question 18 (1 point)

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

Question 18 options:

	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 coffee bean prices leads to a fall in demand for lattes.

Question 19 (1 point)

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

Question 19 options:

	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.

Question 20 (1 point)

All of these influence supply except

Question 20 options:

	a. prices of inputs
	b. expected future prices
	c. extent of competition in the market
	d. price of the product.