Tackle the Test: Free-Response Questions

1. Question

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   Draw three correctly labeled graphs of the money market. Show the effect of each of the following three changes on a separate graph.

   Rubric for FRQ 1 (6 points)

   1 point: The vertical axis is labeled “Interest rate” or “r” and the horizontal axis is labeled “Quantity of money.”

   1 point: The money supply curve is vertical and labeled.

   1 point: The money demand curve is negatively sloped and labeled.

   1 point: The money demand curve shifts right.

   

   1 point: The money demand curve shifts left.

   

   1 point: The money demand curve shifts left.

   

2. Question

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