What is the primary function of a bank? Why do people prefer banks over other financial intermediaries?
The primary job of a bank is to act as an intermediary, taking in deposits from savers and loaning that money to people who want to borrow.
People deposit their money in banks for two main reasons. First, depositing money in a bank is much safer than stashing money in a jar or stuffing it under a mattress. Secondly, depositing money into checking accounts gives consumers easy access to it, either through checks or through cash cards. Deposits are guaranteed safe through deposit insurance, and it may even earn money in interest, depending on the type of deposit account.
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
An increase in potential GDP ________ aggregate supply and ________
A) decreases; shifts the AS curve rightward B) increases; shifts the AS curve rightward C) decreases; shifts the AS curve leftward D) increases; shifts the AS curve leftward E) has no effect on; does not shift the AS curve
If private savings equals $1.2 billion and private investment equals $1.5 billion, then there is a
A) current account balance. B) government sector deficit. C) private sector deficit. D) private sector surplus. E) government sector surplus.
Potential GDP is the maximum output a firm is capable of producing
Indicate whether the statement is true or false