Exam 26: Saving, Investment, and the Financial System

Figure 26-4. On the horizontal axis of the graph, L represents the quantity of loanable funds in billions of dollars. -Refer to Figure 26-4. If the equilibrium quantity of loanable funds is $50 billion and if the equilibrium nominal interest rate is 8 percent, then

From 2009 to 2012, the federal government's budget deficit was about

Which of the following is a certificate of indebtedness?

Net exports must equal zero for any economy

Mandy purchases 68.2 shares of a mutual fund for $1,500. Cassie's purchase of these shares contributes $1,500 to which magnitude in the identity Y = C + I + G?

Which of the following is NOT correct?

Two bonds have the same term to maturity. The first was issued by a state government and the probability of default is believed to be low. The other was issued by a corporation and the probability of default is believed to be high. Which of the following is correct?

The length of time until a bond matures is called the

In macroeconomics, _____ refers to the purchase of new capital.

Which of the following could explain an increase in the interest rate and the equilibrium quantity of loanable funds?

Which of the following statements is correct?

What is the main function of the financial system?

Which of the following would not be a result of replacing the income tax with a consumption tax so that interest income was no longer taxed?

_____ and _____ are the two most important financial intermediaries.

Which of the following lists correctly identifies the four expenditure categories of GDP?

What variable adjusts to balance demand and supply in the market for loanable funds?

The term loanable funds refers to all income that is not used for consumption.

Robert buys bonds. Rachel buys a new truck for her landscaping business. Identify both as savers, investors, both, or neither.

All or part of a firm's profits may be paid out to the firm's stockholders in the form of

A national chain of grocery stores wants to finance the construction of several new stores. The firm has limited internal funds, so it likely will