The __________ rate is the interest rate one bank pays another bank for a loan.
a. discount
b. mortgage
c. reserve requirement
d. federal funds
e. bank-borrowing
Variables X and Y are independent of each other. If we plot X on the horizontal axis and
Y on the vertical axis, the line that connects combinations of X and Y in a two-variable
diagram is
a. parallel to the horizontal axis.
b. downward-sloping (left to right).
c. parallel to the vertical axis.
d. upward-sloping (left to right).
e. a or c
Exhibit 39-2
If P1 is a price support, the quantity of wheat purchased by the government would be
equal to
a. Q0 – Q1.
b. Q2 – Q1.
c. Q2 – Q0.
d. Q2.
e. Q1.
If the quantity demanded of medical care is higher at a zero price than at some positive
price, then it follows that the demand for those specific items that make up health care
will be higher (than it would be if the quantity demanded of health care were lower).
a. True
b. False
Exhibit 38-1
The coupon rate for bond A is
a. 6.0 percent.
b. 10.0 percent.
c. 7.5 percent.
d. 0.075 percent.
The reason people can’t have everything they want is because
a. people are selfish.
b. scarcity exists.
c. there is not enough economic growth in the world.
d. none of the above
Exhibit 11-4
If a person’s taxable income is $20,000, how much does he pay in taxes?
a. $600
b. $30,000
c. $18,000
d. $3,000
Which of the following is a general rule of business etiquette in the given city?
a. Beijing, China: If someone offers you his or her business car, accept it with both
hands, read it immediately, and then present your business card to the person.
b. Hong Kong, China: It is considered impolite to run out of business cards.
c. Sydney, Australia: It is important to know about the latest sports matches.
d. Berlin, Germany: When out with German business associates, try not to talk about
sports.
e. All of the above are examples of proper business etiquette around the world.
Gross Domestic Product (GDP) is the total market value of all
a. final goods and services produced annually within a country’s borders.
b. final and intermediate goods and services produced annually within a country’s
borders.
c. intermediate goods and services produced annually within a country’s borders.
d. final goods produced every month within a country’s borders.
There is no toll charge to drive on freeway A. If there is freeway congestion at 9 a.m.,
there will be greater freeway congestion at 11 a.m. if
a. the demand to drive on the freeway is the same at both times.
b. the demand to drive on the freeway at 11 a.m. is greater than the demand to drive on
the freeway at 9 a.m.
c. the demand to drive on the freeway at 9 a.m. is greater than the demand to drive on
the freeway at 11 a.m.
d. more people carpool at 11 a.m. than at 9 a.m.
e. none of the above.
A “devaluation” occurs when
a. the official price of a currency is raised.
b. the official price of a currency is lowered.
c. a nation’s currency depreciates under a flexible exchange rate system.
d. a nation’s currency appreciates under a flexible exchange rate system.
e. none of the above
A moral hazard problem occurs before a loan is made, and the adverse selection
problem occurs after a loan is made.
a. True
b. False
Suppose that for a given good demand decreases and supply increases at the same time.
If demand decreases by a greater amount than supply increases, then equilibrium price
__________ and equilibrium quantity __________ for that good.
a. rises; rises
b. rises; falls
c. falls; rises
d. falls; falls
If the equilibrium exchange rate between U.S. dollars and Japanese yen is $0.01 = 1
yen, but currently the exchange rate is $0.009 = 1 yen, then with flexible exchange rates
the dollar price of a yen will __________ and the yen will __________.
a. increase; appreciate
b. decrease; appreciate
c. increase; depreciate
d. decrease; depreciate