Question 1

Figure 26-5. Figure 26-5 shows the loanable funds market for a closed economy. 
-Refer to Figure 26-5. Starting at point A, a reduction in government spending would cause

Accepted Answer

A)   the quantity of loanable funds traded to increase to $125 and the interest rate to rise to 7% point 
C)  .
B)   the quantity of loanable funds traded to decrease to $75 and the interest rate to fall to 5% point 
B)  .
C)   the quantity of loanable funds traded to increase to $125 and the interest rate to fall to 5% point 
D)  .
D)   the quantity of loanable funds traded to decrease to $75 and the interest rate to rise to 7% point 
E)  .E) None of the above
F) All of the above

Question 2

Consider the expressions T - G and Y - T - C. Which of the following statements is correct?

Accepted Answer

A)   Each one of these is equal to national saving.
B)   Each one of these is equal to public saving.
C)   The first of these is private saving; the second one is public saving.
D)   The first of these is public saving; the second one is private saving.E) A) and D)
F) A) and C)

Question 3

Suppose government expenditures on goods and services and net taxes both decrease, and expenditures fall by more than net taxes. The effects of these changes on the budget deficit cause

Accepted Answer

A)   both the equilibrium interest rate and the equilibrium quantity of loanable funds to fall.
B)   both the equilibrium interest rate and the equilibrium quantity of loanable funds to rise.
C)   the equilibrium interest rate to rise and the equilibrium quantity of loanable funds to fall.
D)   the equilibrium interest rate to fall and the equilibrium quantity of loanable funds to rise.E) A) and D)
F) B) and D)

Question 4

What would happen in the market for loanable funds if the government were to decrease the tax rate on interest income?

Accepted Answer

A)   There would be an increase in the amount of loanable funds borrowed.
B)   There would be a reduction in the amount of loanable funds borrowed.
C)   There would be no change in the amount of loanable funds borrowed.
D)   The change in loanable funds is uncertain.E) All of the above
F) A) and B)

Question 5

Stocks and bonds

Accepted Answer

A)   and checking accounts are all stores of value and commonly function as mediums of exchange.
B)   and checking accounts are all stores of value, but only stocks and bonds commonly function as mediums of exchange.
C)   and checking accounts are all stores of value, but only checking accounts commonly function as mediums of exchange.
D)   and checking accounts all commonly function as mediums of exchange, but only stocks and bonds are a store of value.E) C) and D)
F) A) and B)

Question 6

Use the following table to answer the following questions.
Table 26-2
 
-Refer to Table 26-2. For which stocks)  isare)  the P/E ratio less than what is historically typical?

Accepted Answer

A)   Boeing Co.
B)   Eli Lilly and Co.
C)   Boeing Co. and Eli Lilly and Co.
D)   All are higher than what is historically typical.E) A) and D)
F) All of the above

Question 7

Which of the following would a macroeconomist consider as investment?

Accepted Answer

A)   Marisa purchases a bond issued by Proctor and Gamble Corp.
B)   Karlee purchases stock issued by Texas Instruments, Inc.
C)   Charlie builds a new coffee shop.
D)   All of the above are correct.E) A) and C)
F) C) and D)

Exam 13: Saving, Investment, and the Financial System

Figure 26-5. Figure 26-5 shows the loanable funds market for a closed economy. -Refer to Figure 26-5. Starting at point A, a reduction in government spending would cause

Correct Answer
verified

What would happen in the market for loanable funds if the government were to decrease the tax rate on interest income?

Correct Answer
verified

Suppose government expenditures on goods and services and net taxes both decrease, and expenditures fall by more than net taxes. The effects of these changes on the budget deficit cause

Correct Answer
verified

Which of the following would a macroeconomist consider as investment?

Correct Answer
verified

Use the following table to answer the following questions. Table 26-2 -Refer to Table 26-2. For which stocks) isare) the P/E ratio less than what is historically typical?

Correct Answer
verified

Consider the expressions T - G and Y - T - C. Which of the following statements is correct?

Correct Answer
verified

Stocks and bonds

Correct Answer
verified

Exam 13: Saving, Investment, and the Financial System

Figure 26-5. Figure 26-5 shows the loanable funds market for a closed economy. -Refer to Figure 26-5. Starting at point A, a reduction in government spending would cause

Correct AnswerverifiedShow Answer

What would happen in the market for loanable funds if the government were to decrease the tax rate on interest income?

Correct AnswerverifiedShow Answer

Suppose government expenditures on goods and services and net taxes both decrease, and expenditures fall by more than net taxes. The effects of these changes on the budget deficit cause

Correct AnswerverifiedShow Answer

Which of the following would a macroeconomist consider as investment?

Correct AnswerverifiedShow Answer

Use the following table to answer the following questions. Table 26-2 -Refer to Table 26-2. For which stocks) isare) the P/E ratio less than what is historically typical?

Correct AnswerverifiedShow Answer

Consider the expressions T - G and Y - T - C. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Stocks and bonds

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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