Exam 23: Finance, Saving, and Investment

At the beginning of the year, Tom's Tubes had capital of 5 tube-inflating machines. During the year, Tom scrapped 2 old machines and purchased 3 new machines. Tom's gross investment for the year is

Which of the following is FALSE?

Refer to the figure below to answer the following question. Figure 23.2.1 -Refer to Figure 23.2.1. In Figure 23.2.1, the economy is at point A on the initial demand for loanable funds curve DLF₀. What happens if the real interest rate rises?

Households will choose to save more if

As a result of a recession, the default risk increases. How does this change affect the loanable funds market?

In 2014, Country A has net taxes of $30 million and government expenditures of $35 million. Private saving in Country A is $5 million and consumption expenditure is $80 million. The government of Country A is running a budget ________ and national saving is ________.

At the beginning of the year, your wealth is $10,000. During the year, you have an income of $90,000 and you spend $80,000 on consumption goods and services. You pay no taxes. Your wealth at the end of the year is

Capital stock increases when

The supply of loanable funds curve

Which of the following influences household saving? I. The real interest rate II. Disposable income III. Expected future income

Refer to the figure below to answer the following questions. Figure 23.2.4 -In Figure 23.2.4, the economy is at point A on the supply of loanable funds curve SLF₀. What happens if disposable income decreases?

The crowding-out effect refers to

Use the table below to answer the following questions. Table 23.2.2 The table shows an economy's demand for loanable funds schedule and supply of loanable funds schedule. -Consider Table 23.2.2. What is the equilibrium real interest rate?

A stock is

If the government begins to run a larger budget deficit, the demand for loanable funds ________ and the real interest rate ________.

The increase in the value of capital is

Refer to the figure below to answer the following questions. Figure 23.2.3 -In Figure 23.2.3, if the real interest rate is constant at 6 percent and and expected profit rises, the amount of loanable funds demanded will be

National saving equals

An increase in disposable income shifts the supply of loanable funds curve

According to the Ricardo-Barro effect,