Exam 23: Finance, Saving, and Investment

In January 2014, Tim's Gyms, Inc. owned machines valued at $1 million. During the year, the market value of the machines fell by 30 percent. During 2011, Tim spent $200,000 on new machines. During 2014, Tim's gross investment was

Choose the statement that is incorrect about Treasury bonds.

During a recession, firms decrease their profit expectations. As a result, there is a ________ shift of the ________ loanable funds curve.

A decrease in disposable income

All of the following are sources of loanable funds EXCEPT

If national saving equals $100,000, net taxes equal $100,000 and government expenditure equals $25,000, what is private saving?

Suppose that a bond promises to pay its holder $100 a year forever. If the price of the bond increases from $1,000 to $1,250, then the interest rate on the bond

Which of the following is true? I. As the real interest rate increases, people increase the quantity they save. II. The supply of loanable funds curve is downward sloping. III. As disposable income increases, the supply of loanable funds curve becomes steeper.

If the economy's capital decreases over time,

This year Pizza Hut spent $1.3 billion on new capital in its stores. Depreciation during the year was $300 million. Pizza Hut's gross investment was ________ and its net investment was ________.

Which of the following is correct?

The demand for loanable funds is the relationship between the quantity of loanable funds demanded and the ________, other things remaining the same.

The government of Greece is running a large budget deficit. With no Ricardo-Barro effect, which of the following events will occur? I. The supply curve of loanable funds will shift leftward. II. A higher real interest rate crowds out investment. III. Saving increases.

Table 23.2.1 -Refer to Table 23.2.1. Private saving is

Investment will be higher if

What is the effect of a decrease in expected profit?

If the real interest rate is below the equilibrium real interest rate,

The real interest rate

A decrease in the government budget deficit decreases the ________ loanable funds and an increase in the government budget surplus increases the ________ loanable funds.

Investment is financed by which of the following? I. Government spending II. Household saving III. Borrowing from the rest of the world