Exam 10: Savings, Investment Spending, and the Financial Syst

Your textbook costs $90, and you can resell it in one year for $45. If the annual interest rate is 10%, then the present value of the textbook's resale value (to the nearest dollar) is:

To reduce risk through diversification, a person must invest in several assets with related, or dependent, risk of loss.

A loan is a liability to the issuer but an asset to the person taking it out.

Capital inflow is:

The government saves when it runs a budget deficit.

In an open economy, GDP is $12 trillion this year. Consumption is $8 trillion, and government spending is $2 trillion. Taxes are $0.5 trillion. Exports are $1 trillion, and imports are $3 trillion. What is the government budget balance?

Most human capital is provided by private spending for private education.

The rate of return on a business project equals:

All other things unchanged, a general increase in government borrowing will typically:

Use the following to answer questions: -(Table: Investment Projects) Use Table: Investment Projects. If the market interest rate declines from 15% to 13%, then the amount of investment demanded will increase by:

In a closed economy, national savings equals:

In an open economy, savings CANNOT come from:

According to the savings-investment spending identity:

Given an annual interest rate of 3%, the present value of a future payment of $2,080 to be paid in one year is:

Which statement is an example of investment spending in macroeconomics?

The financial system contributes to long-run economic growth by channeling funds from savers to businesses for investment spending.

Which item is a tangible object that can be used to generate future income? I. a financial asset II) a physical asset III) a liability

If a country has a trade surplus, we can conclude that it also has a:

You are given the choice of receiving $100 today or $115 one year from today. What annual interest rate will make you indifferent between these two choices?

Your grandmother has promised you $1,000 when you graduate in one year. At a 6% annual interest rate, you can borrow $943.40 and pay it back with your grandmother's gift at graduation.