Banks act as financial intermediaries by:

Banks act as financial intermediaries by:
 a. bringing together car buyers and auto dealers.
 b. bringing together real estate brokers and home buyers.
 c. printing money for all to use.
 d. serving the credit needs of borrowers and the security needs of savers.
  e. selling shares of stock to investors.

QUESTION 2

The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) equals:
 a. 0.5.
 b. the multiplier.
 c. the slope of the consumption function.
  d. 1.0.
 e. the slope of the saving function.

QUESTION 3

The costs of an economic activity borne by the producers are:
 a. always less than social costs.
  b. the full resource costs of an economic activity.
  c. private costs.
  d. all of these.

QUESTION 4

Many people prefer debit cards to checks because:
 a. checkbooks are not required and direct payments are made.
 b. checks are unsafe for use.
 c. debit cards delay money payments.
 d. using checks is time consuming.
 e. debit cards help account holders get a loan from the card issuer.

QUESTION 5

The fraction of an increase in income that is saved is referred to as the _____.
 a. marginal propensity to save
 b. average propensity to save
 c. marginal propensity to consume
  d. average propensity to consume
  e. saving-consumption ratio

QUESTION 6

People are unlikely to choose to pay extra for a low-emissions automobile, because they:
 a. do not fully understand the environmental benefits of lower emissions.
  b. are better off free-riding on others' attempts to reduce emissions.
  c. would have to sacrifice fuel efficiency and automotive performance.
  d. cannot afford the extra expense of green technology.

QUESTION 7

Which of the following is a disadvantage of using debit cards?
 a. Debit cards are unsafe for use.
 b. Debit cards do not provide a grace period between a purchase and required payment.
  c. Debit cards delay payments.
 d. Debit cards are not not easy to use.
 e. Debit cards make purchases more expensive than they actually are.

QUESTION 8

If the marginal propensity to consume is equal to 0.70 and income rises by 20 billion in an economy, then consumption spending will increase by:
 a. 6 billion.
 b. 14 billion.
  c. 20 billion.
  d. 28 billion.
  e. 67 billion.