Question 1

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 primary market 
D) limits the ability of the security to be sold in the secondary market 
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 primary market 
D) limits the ability of the security to be sold in the secondary market

Question 2

The federal debt of the United States is owned to a large extent by foreign institutions and individuals.

Accepted Answer

A) True 
 B)False

Question 3

The primary factors that influence the total amount of savings in an economy in any given period include the trade surplus or deficit and exchange rates.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is most correct?

Accepted Answer

A) Personal consumption expenditures of $10.1 billion in 2009 accounted for about 41 percent of GDP;this percentage relationship has been very stable throughout the decade of the 2000s. 
B) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 11 percent of GDP;this percentage relationship has been very stable throughout the decade of the 2000s. 
C) Personal consumption expenditures of $10.1 trillion in 2009 accounted for about 11 percent of GDP;this percentage relationship has been very unstable throughout the decade of the 2000s. 
D) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 71 percent of GDP;this percentage relationship has been very unstable throughout the decade of the 2000s. 
E) none of the above. 
A) Personal consumption expenditures of $10.1 billion in 2009 accounted for about 41 percent of GDP;this percentage relationship has been very stable throughout the decade of the 2000s. 
B) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 11 percent of GDP;this percentage relationship has been very stable throughout the decade of the 2000s. 
C) Personal consumption expenditures of $10.1 trillion in 2009 accounted for about 11 percent of GDP;this percentage relationship has been very unstable throughout the decade of the 2000s. 
D) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 71 percent of GDP;this percentage relationship has been very unstable throughout the decade of the 2000s. 
E) none of the above.

Question 5

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 1998 during the Clinton 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 1998 during the Clinton administration. 
E) none of the above.

Question 6

Government purchases include expenditures for goods and services by the federal government.

Accepted Answer

A) True 
 B)False

Question 7

In recent years,the United States has been running large trade deficits with both Japan and China.

Accepted Answer

A) True 
 B)False

Question 8

By definition,gross investment must equal gross savings.

Accepted Answer

A) True 
 B)False

Question 9

Gross Private Domestic Investment (GPDI)measures fixed investment in:

Accepted Answer

A) residential and non-residential structures 
B) individual expenditures for nondurable goods 
C) individual expenditures for services 
D) none of the above 
A) residential and non-residential structures 
B) individual expenditures for nondurable goods 
C) individual expenditures for services 
D) none of the above

Question 10

The most important savings surplus unit in the economy is:

Accepted Answer

A) the savings of individuals 
B) corporate savings 
C) U.S.government savings 
D) state and local government savings 
A) the savings of individuals 
B) corporate savings 
C) U.S.government savings 
D) state and local government savings

Question 11

Personal consumption expenditures (PCE)does not include:

Accepted Answer

A) individual expenditures for durable goods 
B) individual expenditures for nondurable goods 
C) individual expenditures for services 
D) all the above are included 
A) individual expenditures for durable goods 
B) individual expenditures for nondurable goods 
C) individual expenditures for services 
D) all the above are included

Question 12

In general,during the business cycle,when economic activity is peaking:

Accepted Answer

A) interest rates begin to creep higher 
B) unemployment levels are low 
C) inflation begins to edge higher 
D) all of the above 
A) interest rates begin to creep higher 
B) unemployment levels are low 
C) inflation begins to edge higher 
D) all of the above

Question 13

Personal consumption expenditures indicate expenditures by individuals for durable goods,nondurable goods,and services.

Accepted Answer

A) True 
 B)False

Question 14

Financial assets include claims in the form of obligations or liabilities issued by individuals,businesses,financial intermediaries,and governments.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is most correct?

Accepted Answer

A) While the dollar amount of imports decreased dramatically in 2006 compared to 2003,they actually increased in 2009 relative to the 2006 level;this development reflects the impact of the 2007-09 financial crisis and the weakening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
B) While the dollar amount of imports increased dramatically in 2006 over 2003,they actually fell in 2009 relative to the 2006 level;this development reflects the impact of the 2007-09 financial crisis and the weakening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
C) While the dollar amount of imports increased dramatically in 2006 over 2003,they actually fell in 2009 relative to the 2006 level;this development reflects the impact of the 2007-09 financial crisis and the strengthening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
D) While the dollar amount of imports decreased dramatically in 2006 compared to 2003,they actually fell in 2009 relative to the 2006 level;this development reflects the impact of the 2007-09 financial crisis and the strengthening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
E) none of the above. 
A) While the dollar amount of imports decreased dramatically in 2006 compared to 2003,they actually increased in 2009 relative to the 2006 level;this development reflects the impact of the 2007-09 financial crisis and the weakening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
B) While the dollar amount of imports increased dramatically in 2006 over 2003,they actually fell in 2009 relative to the 2006 level;this development reflects the impact of the 2007-09 financial crisis and the weakening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
C) While the dollar amount of imports increased dramatically in 2006 over 2003,they actually fell in 2009 relative to the 2006 level;this development reflects the impact of the 2007-09 financial crisis and the strengthening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
D) While the dollar amount of imports decreased dramatically in 2006 compared to 2003,they actually fell in 2009 relative to the 2006 level;this development reflects the impact of the 2007-09 financial crisis and the strengthening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
E) none of the above.

Question 16

In general,during the business cycle,when economic activity is peaking:

Accepted Answer

A) interest rates begin to creep higher 
B) unemployment levels are low 
C) inflation begins to edge higher 
D) all of the above 
E) not enough information to tell 
A) interest rates begin to creep higher 
B) unemployment levels are low 
C) inflation begins to edge higher 
D) all of the above 
E) not enough information to tell

Question 17

The federal government relies primarily on income taxes and social insurance taxes for its revenues.

Accepted Answer

A) True 
 B)False

Question 18

Foreign capital did not play a significant role in the development of the United States.

Accepted Answer

A) True 
 B)False

Question 19

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 up from $2.2 trillion for 1993 largely due to the steep decline in home prices;in addition,the change in private inventories for 2009 was -$125 thousand 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 up from $2.2 trillion for 1993 largely due to the steep decline in home prices;in addition,the change in private inventories for 2009 was -$125 thousand 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 20

Real assets include direct ownership of land,buildings,machinery,inventory,commodities and precious metals.

Accepted Answer

A) True 
 B)False

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

The federal debt of the United States is owned to a large extent by foreign institutions and individuals.

The primary factors that influence the total amount of savings in an economy in any given period include the trade surplus or deficit and exchange rates.

Which of the following statements is most correct?

Which of the following statements is most correct?

Government purchases include expenditures for goods and services by the federal government.

In recent years,the United States has been running large trade deficits with both Japan and China.

By definition,gross investment must equal gross savings.

Gross Private Domestic Investment (GPDI)measures fixed investment in:

The most important savings surplus unit in the economy is:

Personal consumption expenditures (PCE)does not include:

In general,during the business cycle,when economic activity is peaking:

Personal consumption expenditures indicate expenditures by individuals for durable goods,nondurable goods,and services.

Financial assets include claims in the form of obligations or liabilities issued by individuals,businesses,financial intermediaries,and governments.

Which of the following statements is most correct?

In general,during the business cycle,when economic activity is peaking:

The federal government relies primarily on income taxes and social insurance taxes for its revenues.

Foreign capital did not play a significant role in the development of the United States.

Which of the following statements is most correct?

Real assets include direct ownership of land,buildings,machinery,inventory,commodities and precious metals.

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

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

The federal debt of the United States is owned to a large extent by foreign institutions and individuals.

The primary factors that influence the total amount of savings in an economy in any given period include the trade surplus or deficit and exchange rates.

Which of the following statements is most correct?

Which of the following statements is most correct?

Government purchases include expenditures for goods and services by the federal government.

In recent years,the United States has been running large trade deficits with both Japan and China.

By definition,gross investment must equal gross savings.

Gross Private Domestic Investment (GPDI)measures fixed investment in:

The most important savings surplus unit in the economy is:

Personal consumption expenditures (PCE)does not include:

In general,during the business cycle,when economic activity is peaking:

Personal consumption expenditures indicate expenditures by individuals for durable goods,nondurable goods,and services.

Financial assets include claims in the form of obligations or liabilities issued by individuals,businesses,financial intermediaries,and governments.

Which of the following statements is most correct?

In general,during the business cycle,when economic activity is peaking:

The federal government relies primarily on income taxes and social insurance taxes for its revenues.

Foreign capital did not play a significant role in the development of the United States.

Which of the following statements is most correct?

Real assets include direct ownership of land,buildings,machinery,inventory,commodities and precious metals.

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