Question 1

Which of the following is a savings deficit unit?

Accepted Answer

A) businesses 
B) government 
C) individuals 
D) both a and b 
A) businesses 
B) government 
C) individuals 
D) both a and b

Question 2

Which of the following statements is false?

Accepted Answer

A) Factors affecting the amount of savings include: levels of income,economic expectations,cyclical influences,and the life stage of the individual saver. 
B) Gross savings are the profits remaining after tax,and in the case of corporations,after the payment of cash dividends to stockholders. 
C) Voluntary savings are financial assets set aside for use in the future. 
D) After the Civil War,the United States enjoyed an autonomous capital formation process. 
A) Factors affecting the amount of savings include: levels of income,economic expectations,cyclical influences,and the life stage of the individual saver. 
B) Gross savings are the profits remaining after tax,and in the case of corporations,after the payment of cash dividends to stockholders. 
C) Voluntary savings are financial assets set aside for use in the future. 
D) After the Civil War,the United States enjoyed an autonomous capital formation process.

Question 3

Gross domestic product is equal to the sum of all of the following EXCEPT:

Accepted Answer

A) personal consumption expenditures 
B) net exports 
C) government expenditures 
D) all of the above are included 
A) personal consumption expenditures 
B) net exports 
C) government expenditures 
D) all of the above are included

Question 4

Which of the following statements is most correct?

Accepted Answer

A) Contractual savings include such things as accumulation of reserves in insurance and pension funds and deposits to time and savings accounts in commercial banks. 
B) As savings increased in the United States,there was a change in our status from a creditor nation to a debtor nation. 
C) In the U.S.economy,recessions can be avoided with the appropriate fiscal policy. 
D) Corporate bonds and stocks are said to be indirect securities,while commercial bank time deposits would represent primary instruments in terms of the savings investment process. 
E) none of the above 
A) Contractual savings include such things as accumulation of reserves in insurance and pension funds and deposits to time and savings accounts in commercial banks. 
B) As savings increased in the United States,there was a change in our status from a creditor nation to a debtor nation. 
C) In the U.S.economy,recessions can be avoided with the appropriate fiscal policy. 
D) Corporate bonds and stocks are said to be indirect securities,while commercial bank time deposits would represent primary instruments in terms of the savings investment process. 
E) none of the above

Question 5

Indirect financing involves the use of securities that represent specific contracts between the savers and borrowers themselves.

Accepted Answer

A) True 
 B)False

Question 6

If the imports of goods and services exceed exports,GDP will be higher.

Accepted Answer

A) True 
 B)False

Question 7

Voluntary savings are savings accumulated on a regular schedule for a specified length of time by prior agreement.

Accepted Answer

A) True 
 B)False

Question 8

The life stages of an individual saver include all of the following EXCEPT:

Accepted Answer

A) the formative/education developing stage 
B) the career earning/family creating stage 
C) the wealth building stage 
D) all of the above are life stages of savers 
A) the formative/education developing stage 
B) the career earning/family creating stage 
C) the wealth building stage 
D) all of the above are life stages of savers

Question 9

If an individual supplies funds to a business firm by purchasing bonds issued by the firm,the transaction:

Accepted Answer

A) creates two types of financial assets and two types of financial liabilities 
B) increases the liquidity and safety of principal for the individual 
C) initially occurs in the secondary market 
D) limits the ability of the security to be sold in the secondary market 
E) none of the above 
A) creates two types of financial assets and two types of financial liabilities 
B) increases the liquidity and safety of principal for the individual 
C) initially occurs in the secondary market 
D) limits the ability of the security to be sold in the secondary market 
E) none of the above

Question 10

Undistributed profit is the proportion of after-tax profit paid as dividends to shareholders by a corporation.

Accepted Answer

A) True 
 B)False

Question 11

Greater potential savings would result from a (n):

Accepted Answer

A) age distribution shift to more teenagers 
B) shift to more elderly people in the total population 
C) shift to more young married couples 
D) shift to more middle-aged families 
A) age distribution shift to more teenagers 
B) shift to more elderly people in the total population 
C) shift to more young married couples 
D) shift to more middle-aged families

Question 12

Direct securities:

Accepted Answer

A) are contracts between savers and institutions 
B) are contracts between savers and borrowers 
C) represent the financial asset of the borrower and the claim on the saver 
D) represent the claim on the institution 
A) are contracts between savers and institutions 
B) are contracts between savers and borrowers 
C) represent the financial asset of the borrower and the claim on the saver 
D) represent the claim on the institution

Question 13

Which of the following statements is most correct?

Accepted Answer

A) The federal government has produced annual budget deficits for all years but four,when it ran consecutive budget surpluses that began in 1986 during the Reagan administration. 
B) The federal government has produced annual budget deficits for all years but four,when it ran consecutive budget surpluses that began in 1990 during the George H.W.Bush administration. 
C) The federal government has produced annual budget deficits for all years but four,when it ran consecutive budget surpluses that began in 2002 during the George W.Bush administration. 
D) The federal government has produced annual budget deficits for all years but four,when it ran consecutive budget surpluses that began in 1978 during the Carter administration. 
E) none of the above. 
A) The federal government has produced annual budget deficits for all years but four,when it ran consecutive budget surpluses that began in 1986 during the Reagan administration. 
B) The federal government has produced annual budget deficits for all years but four,when it ran consecutive budget surpluses that began in 1990 during the George H.W.Bush administration. 
C) The federal government has produced annual budget deficits for all years but four,when it ran consecutive budget surpluses that began in 2002 during the George W.Bush administration. 
D) The federal government has produced annual budget deficits for all years but four,when it ran consecutive budget surpluses that began in 1978 during the Carter administration. 
E) none of the above.

Question 14

Which of the following statements factors contributed to the 2007-2009 financial crisis?

Accepted Answer

A) The cultural shift that allowed the public to "spend now and pay later"-rather than their parents' or grandparents' philosophy of "save now,spend later" led to increases in consumer debt levels. 
B) U.S.government officials engaged in efforts to expand home ownership by encouraging lenders to make mortgage loans available to a broader spectrum of individuals. 
C) Federal fiscal policy also became simulative,with increased government spending and the passage of tax cuts in 2002. 
D) The Federal Reserve adopted an expansionary monetary policy characterized by very low interest rates. 
E) all of the above. 
A) The cultural shift that allowed the public to "spend now and pay later"-rather than their parents' or grandparents' philosophy of "save now,spend later" led to increases in consumer debt levels. 
B) U.S.government officials engaged in efforts to expand home ownership by encouraging lenders to make mortgage loans available to a broader spectrum of individuals. 
C) Federal fiscal policy also became simulative,with increased government spending and the passage of tax cuts in 2002. 
D) The Federal Reserve adopted an expansionary monetary policy characterized by very low interest rates. 
E) all of the above.

Question 15

Early developments in transportation were ultimately financed by:

Accepted Answer

A) private promoters 
B) current government revenues 
C) savings of individuals 
D) foreign securities 
A) private promoters 
B) current government revenues 
C) savings of individuals 
D) foreign securities

Question 16

Voluntary savings are financial assets set aside for use in the future.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is most correct?

Accepted Answer

A) Capital formation was $1.6 trillion in 2009 up from $2.2 billion for 2006 largely due to the steep rise in home prices;in addition,the change in private inventories for 2009 was -$125 billion reflecting the severity of the financial crisis of 2007-09. 
B) Capital formation was $1.6 billion in 2009 down from $2.2 trillion for 2006 largely due to the steep decline in home prices;in addition,the change in private inventories for 2009 was +$125 billion reflecting the severity of the financial crisis of 2007-09. 
C) Capital formation was $1.6 trillion in 2009 down from $2.2 trillion for 2006 largely due to the steep decline in home prices;in addition,the change in private inventories for 2009 was -$125 billion reflecting the severity of the financial crisis of 2007-09. 
D) Capital formation was $1.6 million in 2009 down from $2.2 million for 2006 largely due to the steep decline in home prices;in addition,the change in private inventories for 2009 was -$125 million reflecting the severity of the financial crisis of 2007-09. 
E) none of the above. 
A) Capital formation was $1.6 trillion in 2009 up from $2.2 billion for 2006 largely due to the steep rise in home prices;in addition,the change in private inventories for 2009 was -$125 billion reflecting the severity of the financial crisis of 2007-09. 
B) Capital formation was $1.6 billion in 2009 down from $2.2 trillion for 2006 largely due to the steep decline in home prices;in addition,the change in private inventories for 2009 was +$125 billion reflecting the severity of the financial crisis of 2007-09. 
C) Capital formation was $1.6 trillion in 2009 down from $2.2 trillion for 2006 largely due to the steep decline in home prices;in addition,the change in private inventories for 2009 was -$125 billion reflecting the severity of the financial crisis of 2007-09. 
D) Capital formation was $1.6 million in 2009 down from $2.2 million for 2006 largely due to the steep decline in home prices;in addition,the change in private inventories for 2009 was -$125 million reflecting the severity of the financial crisis of 2007-09. 
E) none of the above.

Question 18

Capital consumption allowances are estimates of the "using up" of plant equipment assets for businesses.

Accepted Answer

A) True 
 B)False

Question 19

A saver who chooses securities as a savings medium and desires maximum safety of principal buys:

Accepted Answer

A) public utility stocks 
B) corporate stocks 
C) high-grade corporate bonds 
D) government bonds 
A) public utility stocks 
B) corporate stocks 
C) high-grade corporate bonds 
D) government bonds

Question 20

Savings surplus occurs when an economic unit has current income that exceeds its direct investment in real assets.

Accepted Answer

A) True 
 B)False

Which of the following is a savings deficit unit?

Which of the following statements is false?

Gross domestic product is equal to the sum of all of the following EXCEPT:

Which of the following statements is most correct?

Indirect financing involves the use of securities that represent specific contracts between the savers and borrowers themselves.

If the imports of goods and services exceed exports,GDP will be higher.

Voluntary savings are savings accumulated on a regular schedule for a specified length of time by prior agreement.

The life stages of an individual saver include all of the following EXCEPT:

If an individual supplies funds to a business firm by purchasing bonds issued by the firm,the transaction:

Undistributed profit is the proportion of after-tax profit paid as dividends to shareholders by a corporation.

Greater potential savings would result from a (n):

Direct securities:

Which of the following statements is most correct?

Which of the following statements factors contributed to the 2007-2009 financial crisis?

Early developments in transportation were ultimately financed by:

Voluntary savings are financial assets set aside for use in the future.

Which of the following statements is most correct?

Capital consumption allowances are estimates of the "using up" of plant equipment assets for businesses.

A saver who chooses securities as a savings medium and desires maximum safety of principal buys:

Savings surplus occurs when an economic unit has current income that exceeds its direct investment in real assets.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 7: Savings and Investment Process

Which of the following is a savings deficit unit?

Which of the following statements is false?

Gross domestic product is equal to the sum of all of the following EXCEPT:

Which of the following statements is most correct?

Indirect financing involves the use of securities that represent specific contracts between the savers and borrowers themselves.

If the imports of goods and services exceed exports,GDP will be higher.

Voluntary savings are savings accumulated on a regular schedule for a specified length of time by prior agreement.

The life stages of an individual saver include all of the following EXCEPT:

If an individual supplies funds to a business firm by purchasing bonds issued by the firm,the transaction:

Undistributed profit is the proportion of after-tax profit paid as dividends to shareholders by a corporation.

Greater potential savings would result from a (n):

Direct securities:

Which of the following statements is most correct?

Which of the following statements factors contributed to the 2007-2009 financial crisis?

Early developments in transportation were ultimately financed by:

Voluntary savings are financial assets set aside for use in the future.

Which of the following statements is most correct?

Capital consumption allowances are estimates of the "using up" of plant equipment assets for businesses.

A saver who chooses securities as a savings medium and desires maximum safety of principal buys:

Savings surplus occurs when an economic unit has current income that exceeds its direct investment in real assets.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters