Exam 7: Finance, Saving, and Investment

If two households have the same disposable income in the current year,the household with the

In the loanable funds market,the supply comes from

National saving is defined as the amount of

-In the above figure,the demand for loanable funds curve is drawn for the average expected profit.If the real interest rate is constant at 6 percent and the expected profit rises,the amount of loanable funds demanded will be

According to the Ricardo-Barro effect,

The table below shows data for the United States. Nominal Interest Rate Inflation Rate 2011 5.25 4 2012 5 2 2013 4.5 4.3 Between 2011 and 2012,the real interest rate ________ and caused a ________ the demand for loanable funds curve.

In 2010,the United States and foreign economies start to recover from the recession. U.S.firms increase their profit expectations.As a result,the demand for loanable funds curve shifts ________ and the real interest rate ________.

-In the above figure,new expectations of booming business conditions and a higher expected profit will

Suppose Country A had net taxes of $30 million and government expenditures of $35 million. In addition,household saving in Country A totalled $5 million while consumption was $80 million. The government of Country A is running a budget ________ and national saving is ________ million.

In the loanable funds market,an increase in wealth shifts the ________ loanable funds curve ________.

________ increases households' saving.

According to the Ricardo-Barro effect,government deficits

Investment is financed by which of the following? I. Government spending II. National saving III. Borrowing from the rest of the world

What are the factors that change the supply of saving and shift the supply of loanable funds curve?

At the beginning of the year,Tom's Tubes had a capital stock of 5 tube inflating machines.During the year,Tom scrapped 2 old machines and purchased 3 new machines.Tom's capital stock at the end of year equals

In January 2013,Tim's Gyms,Inc.owned machines valued at $1 million. During the year,the market value of the equipment fell by 30 percent. During 2013,Tim spent $200,000 on new machines.During 2013,Tim's gross investment totalled

In November 2008,automobile executives from Ford,GM and Chrysler testified to Congress that their firms needed a $25 billion bailout to prevent bankruptcies. The executives stated that part of the cash would be used to re-design production lines. The $25 billion is ________ and the re-designed production lines are ________.

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.You pay no taxes.Your wealth at the end of the year is

Which of the following are included in the supply of loanable funds? I. private saving II. government budget surplus III. international borrowing

If the real interest rate is above the equilibrium real interest rate,