Answers26-27 Ignite Economics-KY-EconomicsInvesting and Financial Markets

Investing and Financial Markets — Unit test Answers

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21
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In microeconomics, what occurs when equilibrium is reached?

A
Prices decline.
B
Prices increase.
C
Prices are set.
D
Prices fluctuate.
22
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Which are the roles of a bank? Check all that apply.Storing and holding moneyMaking purchases to create profitsLending moneyInvesting in the economyCreating money for the economy

A
Storing and holding money
B
Making purchases to create profits
C
Lending money
D
Investing in the economy
E
Creating money for the economy
23

Hyperinflation can occur when

A
consumers begin purchasing more goods.
B
producers need more money to make and distribute goods.
C
companies raise prices to pass on costs to consumers.
D
the government prints a ton of money in order to pay off its debt.
24

During a recession, what is one way governments try to encourage growth?

b
by increasing unemployment benefits
b
by stopping government spending
b
by requiring firms to maintain production
b
by eliminating all tax breaks
25

How do bonds generate income for investors?

A
Bonds depreciate in value.
B
Bonds protect investors from bankruptcy.
C
Bonds pay interest to the bank that sold the bond.
D
Bonds pay a specified amount to the investor at maturity.

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