Question 1

Gross private domestic investment measures a nation's output of goods and services for a specified period of time.

Accepted Answer

A) True 
 B)False

Question 2

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,financial assets and financial liabilities are created when balancing savings surplus and savings deficit units. 
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. 
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,financial assets and financial liabilities are created when balancing savings surplus and savings deficit units. 
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.

Question 3

The process of balancing savings surplus and savings deficit units by channeling savings into investment through a financial intermediary does not result in the:

Accepted Answer

A) individuals receiving safety of principal,liquidity,and a return on their savings 
B) business firm anticipating earning a return on its investment in real assets that is lower than the interest cost on the institution loan 
C) intermediary being compensated for facilitating the savings and investment process 
D) creation of two types of financial assets and two types of financial liabilities 
A) individuals receiving safety of principal,liquidity,and a return on their savings 
B) business firm anticipating earning a return on its investment in real assets that is lower than the interest cost on the institution loan 
C) intermediary being compensated for facilitating the savings and investment process 
D) creation of two types of financial assets and two types of financial liabilities

Question 4

Which of the following represent the most important instrument used to raise funds in the credit markets?

Accepted Answer

A) corporate bonds 
B) tax-exempt obligations 
C) consumer debt 
D) mortgages 
A) corporate bonds 
B) tax-exempt obligations 
C) consumer debt 
D) mortgages

Question 5

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

Question 6

Which of the following statements is most correct?

Accepted Answer

A) As levels of income decrease,an individual may dissave,that is,reduce further consumption expenditures rather than liquidate accumulated savings. 
B) The ability to provide adequate funds to meet our investment needs is dependent primarily on the savings of corporations and the government. 
C) In terms of the amount of funds raised annually in the credit markets,borrowing by the state and local government sector is smaller than borrowing by the U.S.government. 
D) All of the above statements are correct. 
A) As levels of income decrease,an individual may dissave,that is,reduce further consumption expenditures rather than liquidate accumulated savings. 
B) The ability to provide adequate funds to meet our investment needs is dependent primarily on the savings of corporations and the government. 
C) In terms of the amount of funds raised annually in the credit markets,borrowing by the state and local government sector is smaller than borrowing by the U.S.government. 
D) All of the above statements are correct.

Question 7

When taxes and general revenues fail to meet expenditures,a budgetary deficit occurs.

Accepted Answer

A) True 
 B)False

Question 8

Net exports are exports of goods and services plus imports of goods and services.

Accepted Answer

A) True 
 B)False

Question 9

Direct payments to individuals from the Federal government do not include:

Accepted Answer

A) Social Security payments. 
B) Medicare payments 
C) health expenditures 
D) all the above are included 
A) Social Security payments. 
B) Medicare payments 
C) health expenditures 
D) all the above are included

Question 10

Which of the following statements is most correct?

Accepted Answer

A) Corporate after-tax profits rose from $473.8 billion in 2006 to $616.2 billion in 2008.This rise coincided with the 2007-09 financial crisis. 
B) Corporate after-tax profits remained about the same at $500 million between 2006 and 2008. 
C) Corporate after-tax profits declined from $616.2 million in 2006 to $473.8 million in 2008.This decline coincided with the 2007-09 financial crisis. 
D) Corporate after-tax profits rose from $473.8 million in 2006 to $616.2 million in 2008.This rise coincided with the 2007-09 financial crisis. 
E) none of the above. 
A) Corporate after-tax profits rose from $473.8 billion in 2006 to $616.2 billion in 2008.This rise coincided with the 2007-09 financial crisis. 
B) Corporate after-tax profits remained about the same at $500 million between 2006 and 2008. 
C) Corporate after-tax profits declined from $616.2 million in 2006 to $473.8 million in 2008.This decline coincided with the 2007-09 financial crisis. 
D) Corporate after-tax profits rose from $473.8 million in 2006 to $616.2 million in 2008.This rise coincided with the 2007-09 financial crisis. 
E) none of the above.

Question 11

Private financial intermediation generally represents an important annual source of funds supplied to credit markets.Which of the following intermediaries has failed to supply funds during one or more recent years?

Accepted Answer

A) commercial banks 
B) thrift institutions 
C) insurance and pension funds 
D) other financial intermediaries 
A) commercial banks 
B) thrift institutions 
C) insurance and pension funds 
D) other financial intermediaries

Question 12

Local governments depend heavily on property taxes for their revenues,while state governments depend largely on sales taxes and special taxes,such as those on tobacco products.

Accepted Answer

A) True 
 B)False

Question 13

The short-term accumulation of financial assets on the part of business corporations:

Accepted Answer

A) are primarily held in derivative securities 
B) add to the level of long-term savings of the economy as a whole 
C) do not enter the monetary stream to fund consumers,government,or other businesses 
D) are held in the form of long-term obligations of the federal government 
E) none of the above 
A) are primarily held in derivative securities 
B) add to the level of long-term savings of the economy as a whole 
C) do not enter the monetary stream to fund consumers,government,or other businesses 
D) are held in the form of long-term obligations of the federal government 
E) none of the above

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Which one the following four basic economic units consistently represents a savings surplus unit?

Accepted Answer

A) individuals 
B) business firms 
C) financial intermediaries 
D) governments 
A) individuals 
B) business firms 
C) financial intermediaries 
D) governments

Question 16

Capital formation is the process of constructing real property,manufacturing producers' durable equipment,and increasing business inventories.

Accepted Answer

A) True 
 B)False

Question 17

The short-term accumulation of financial assets on the part of business corporations:

Accepted Answer

A) are held in short-term,safe,and liquid debt obligations 
B) add to the level of long-term savings of the economy as a whole 
C) do not enter the monetary stream to fund consumers,government,or other businesses 
D) are held in the form of long-term obligations of the federal government 
A) are held in short-term,safe,and liquid debt obligations 
B) add to the level of long-term savings of the economy as a whole 
C) do not enter the monetary stream to fund consumers,government,or other businesses 
D) are held in the form of long-term obligations of the federal government

Question 18

Which of the following is the most liquid form of savings?

Accepted Answer

A) cash balances 
B) time deposits 
C) insurance reserves 
D) securities 
A) cash balances 
B) time deposits 
C) insurance reserves 
D) securities

Question 19

New York Stock Exchange is an example of a primary market.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following sources of savings is consistently the largest on an annual basis?

Accepted Answer

A) personal savings 
B) undistributed corporate profits 
C) federal,state,and local government surpluses 
D) capital consumption allowances 
A) personal savings 
B) undistributed corporate profits 
C) federal,state,and local government surpluses 
D) capital consumption allowances

Gross private domestic investment measures a nation's output of goods and services for a specified period of time.

Which of the following statements is most correct?

The process of balancing savings surplus and savings deficit units by channeling savings into investment through a financial intermediary does not result in the:

Which of the following represent the most important instrument used to raise funds in the credit markets?

Personal consumption expenditures (PCE)does not include:

Which of the following statements is most correct?

When taxes and general revenues fail to meet expenditures,a budgetary deficit occurs.

Net exports are exports of goods and services plus imports of goods and services.

Direct payments to individuals from the Federal government do not include:

Which of the following statements is most correct?

Private financial intermediation generally represents an important annual source of funds supplied to credit markets.Which of the following intermediaries has failed to supply funds during one or more recent years?

Local governments depend heavily on property taxes for their revenues,while state governments depend largely on sales taxes and special taxes,such as those on tobacco products.

The short-term accumulation of financial assets on the part of business corporations:

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

Which one the following four basic economic units consistently represents a savings surplus unit?

Capital formation is the process of constructing real property,manufacturing producers' durable equipment,and increasing business inventories.

The short-term accumulation of financial assets on the part of business corporations:

Which of the following is the most liquid form of savings?

New York Stock Exchange is an example of a primary market.

Which of the following sources of savings is consistently the largest on an annual basis?

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

Gross private domestic investment measures a nation's output of goods and services for a specified period of time.

Which of the following statements is most correct?

The process of balancing savings surplus and savings deficit units by channeling savings into investment through a financial intermediary does not result in the:

Which of the following represent the most important instrument used to raise funds in the credit markets?

Personal consumption expenditures (PCE)does not include:

Which of the following statements is most correct?

When taxes and general revenues fail to meet expenditures,a budgetary deficit occurs.

Net exports are exports of goods and services plus imports of goods and services.

Direct payments to individuals from the Federal government do not include:

Which of the following statements is most correct?

Private financial intermediation generally represents an important annual source of funds supplied to credit markets.Which of the following intermediaries has failed to supply funds during one or more recent years?

Local governments depend heavily on property taxes for their revenues,while state governments depend largely on sales taxes and special taxes,such as those on tobacco products.

The short-term accumulation of financial assets on the part of business corporations:

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

Which one the following four basic economic units consistently represents a savings surplus unit?

Capital formation is the process of constructing real property,manufacturing producers' durable equipment,and increasing business inventories.

The short-term accumulation of financial assets on the part of business corporations:

Which of the following is the most liquid form of savings?

New York Stock Exchange is an example of a primary market.

Which of the following sources of savings is consistently the largest on an annual basis?

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