Exam 26: Saving, Investment, and the Financial System

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Most entrepreneurs finance their purchases of real capital using their past saving.

(True/False)
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A _____ is a certificate of indebtedness and a _____ is a claim to partial ownership in a firm.

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When the government budget deficit rises, national saving is reduced, interest rates rise, and investment falls.

(True/False)
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Alberta buys a paint sprayer and a lift for her car customizing shop. A macroeconomist would refer to these purchases as investment.

(True/False)
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In a closed economy, Y - C - G equals _____. The variable Y is _____, C is _____, and G is _____.

(Short Answer)
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