Exam 7: Finance, Saving, and Investment

If the Ricardo-Barro effect is present,a government budget deficit raises the equilibrium real interest rate by ________ and decreases the equilibrium quantity of investment by ________ than if the Ricardo-Barro effect is absent.

All of the following are points of the Restoring American Financial Stability Act of 2010 EXCEPT:

-In the above figure,the economy is at point a on the initial supply of loanable funds curve SLF₀.What happens if the interest rate rises?

The Ricardo-Barro effect holds that

If U.S.exports are $2.2 billion and our imports are $2.7 billion,

Explain the relationship between the real interest rate and the demand for loanable funds.Compare that relationship to the relationship between expected profit and the demand for loanable funds.

If national saving (S) is $100,000,net taxes (T) equal $100,000 and government expenditure (G) is $25,000,how much are households and businesses saving?

In May,2011,the interest rate in North Korea was 5.4 percent. For the same month,the interest rate in the United States was slightly more than 1 percent.Suppose the risks in North Korea were the same as in the United States.If North Korea were integrated into the global economy,then

If the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded,then ________.

People know that the inflation rate will decrease from 7 percent to 3 percent.As a result

In 2007,France's GDP totaled $1.9 trillion and in 2006 GDP was $1.8 trillion. The total amount spent on new capital in 2007 was $357 billion and in 2006 was $335 billion. To calculate the amount of net investment in France for these years,you need to know ________.

If the nominal interest rate is 8 percent and the inflation rate is 2 percent,the real interest rate is approximately

The supply of loanable funds is the relationship between loanable funds and ________ other things remaining the same.

When the real interest rate rises

Explain how each of the following events affect the supply of loanable funds curve: a) The economy is in a recession so people's disposable income is lower. b) The stock market is booming so the people's wealth is higher. c) Fewer college graduates are finding jobs so expected future income is lower. d) The real interest rate increases.

When the inflation rate is zero,the

Which of the following items are considered physical capital? I. shares of Ford stock traded on the New York Stock Exchange II. the Taco Bell store nearest you III. the rental cars owned by Hertz Rental-A-Car IV. the salaries paid to Intel executives

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

The ________ the expected profit,the greater is the ________.

An increase in the ________ is an example of a capital gain.