AP Macroeconomics Unit 4

Front

The cost of borrowed money, usually expressed as a percentage.

Back

interest

Front

Amount of money originally borrowed

Back

Principal

Front

What does CD stand for when talking about investments?

Back

Certificate of Deposit

Front

This is an obligation of repayment, usually including principal plus interest; any time you owe someone money.

Back

debt

Front

The availability of money; how quickly you can convert it into cash in your hand is its _______.

Back

liquidity

Front

Who pays interest on a loan?

Back

The borrower

Front

Who pays interest when you deposit money in the bank?

Back

The bank

Front

In general, the higher the potential return on an investment, the riskier the investment.

Back

True

Front

If a bank pays 3% interest on savings, how much interest will it charge for loans?

Back

more than 3%

Front

If Mr. Woodward's disposable income increases from $600 to $650 and her level of personal consumption expenditures increase from $480 to $520, you may conclude that her marginal propensity to

Back

consume is 0.8