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Question 7 (Multiple Choice Worth 2 points) If April's disposable income increases from $500 to $750 and her savings increases from $100 to $150,...


Question 7

(Multiple Choice Worth 2 points)

If April's disposable income increases from $500 to $750 and her savings increases from $100 to $150, then her marginal propensity to

 consume is 0.2.

 consume is 5.

 save is 0.2.

 save is 0.8.

 save is 5.


Question 8

(Multiple Choice Worth 2 points)

If David buys a movie from Target™, then his purchase is recorded between the

 household and the factor market.

 household and the financial market.

 household and the product market.

 household and the business.

 household and the government.


Question 9

(Multiple Choice Worth 2 points)

In an effort to compete with foreign markets, suppose production facilities across the nation operating at full employment, added a night shift to their production schedules for the first time. Which of the following is true?

  1. Economic growth will increase if these are new resources.
  2. Production will increase.
  3. There will be a movement along the production possibilities curve in the direction of consumer goods.

 I only.

 II only.

 III only.

 I and II only.

 I, II, and III.


Question 10

(Multiple Choice Worth 2 points)

If the dollar price of the Argentine peso increases, how will U.S. imports from and exports to Argentina be impacted?

Imports / Exports

 Increase / Increase

 Increase / Decrease

 Decrease / No change

 Decrease / Increase

 Decrease / Decrease


Question 11

(Multiple Choice Worth 2 points)

If the dollar price of the Icelandic króna decreases, how will U.S. imports from and exports to Iceland be impacted?

Imports / Exports

 Increase / Increase

 Increase / Decrease

 Decrease / No change

 Decrease / Increase

 Decrease / Decrease


Question 12

(Multiple Choice Worth 2 points)

Assume the CPI increases from 100 to 110 and a person's nominal income increases from $50,000 to $55,000 over the same period. This person's real income has

 increased by 5%.

 increased by 10%.

 increased by 20%.

 increased by 25%.

 remained the same.


Question 13

(Multiple Choice Worth 2 points)

You have an opportunity to purchase season tickets for the local professional football team. The sales representative shows you a color-coded picture of the arena. Each color represents a different ticket price. This best illustrates money used as a

 store of value.

 medium of exchange.

 unit of account.

 liquid asset.

 liability.


Question 14

(Multiple Choice Worth 2 points)

Which of the following is not part of M1?

 Checkable deposits

 Savings deposits

 Currency

 Traveler's checks

 Coins


Question 15

(Multiple Choice Worth 2 points)

If you use money as a store of value, you would be

 buying a new radio.

 searching the Internet for a deal on a new computer.

 charging a new book on your credit card.

 withdrawing $500 from your savings account.

 putting money in a savings bond.

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