Question 1

Which of the following is both a store of value and a common medium of exchange?

Accepted Answer

A) corporate bonds 
B) mutual funds 
C) chequing account balances 
D) a pension plan 
A) corporate bonds 
B) mutual funds 
C) chequing account balances 
D) a pension plan

Question 2

Assuming that other things remain the same, what will happen to the interest on a bond as the bond's maturity increases?

Accepted Answer

A) As maturity increases, the bond will have less interest because it has less risk. 
B) As maturity increases, the bond will have less interest because it has more risk. 
C) As maturity increases, the bond will have more interest because it has more risk. 
D) There is no relation between term to maturity and risk. 
A) As maturity increases, the bond will have less interest because it has less risk. 
B) As maturity increases, the bond will have less interest because it has more risk. 
C) As maturity increases, the bond will have more interest because it has more risk. 
D) There is no relation between term to maturity and risk.

Question 3

Which of the following equations will always represent GDP in an open economy?

Accepted Answer

A) S = I - G 
B) I = Y - C + G 
C) Y = C + I + G 
D) Y = C + I + G + NX 
A) S = I - G 
B) I = Y - C + G 
C) Y = C + I + G 
D) Y = C + I + G + NX

Question 4

Figure 8-1  
-Refer to Figure 8-1. Which of the graphs in the figure shows the effects of an increase in the tax rate on saving?

Accepted Answer

A) graph 1 
B) graph 2 
C) graph 3 
D) none of the three graphs 
A) graph 1 
B) graph 2 
C) graph 3 
D) none of the three graphs

Question 5

The following table shows information about bonds issued by governments and companies in Canada, sorted by increasing maturity. (Source: Globe and Mail, retrieved 12 August, 2010,  HYPERLINK "http://www.globeinvestor.com/servlet/Page/document/v5/data/bonds/" http://www.globeinvestor.com/servlet/Page/document/v5/data/bonds/). Does this information support the theory that less risky bonds yield lower returns? Explain your answer.

Accepted Answer

According to the theory, the return on a

Question 6

Which of the following is the primary advantage of mutual funds?

Accepted Answer

A) They usually make a return that "beats the market." 
B) They allow people with small amounts of money to diversify. 
C) They provide customers with a medium of exchange. 
D) They allow investing in venture companies. 
A) They usually make a return that "beats the market." 
B) They allow people with small amounts of money to diversify. 
C) They provide customers with a medium of exchange. 
D) They allow investing in venture companies.

Question 7

Table 8-2.
  
-Refer to Table 8-2. Which company had the lowest earnings per share?

Accepted Answer

A) Boeing Co. 
B) Eli Lily and Co. 
C) H.J. Heinz and Co. 
D) Kellogg Co. 
A) Boeing Co. 
B) Eli Lily and Co. 
C) H.J. Heinz and Co. 
D) Kellogg Co.

Question 8

Which of the following would most likely happen in the market for loanable funds if the government were to decrease the tax on interest income?

Accepted Answer

A) There would be an increase in the amount of loanable funds borrowed. 
B) There would be a reduction in the amount of loanable funds borrowed. 
C) There would be no change in the amount of loanable funds borrowed. 
D) The change in loanable funds borrowed would be ambiguous. 
A) There would be an increase in the amount of loanable funds borrowed. 
B) There would be a reduction in the amount of loanable funds borrowed. 
C) There would be no change in the amount of loanable funds borrowed. 
D) The change in loanable funds borrowed would be ambiguous.

Which of the following is both a store of value and a common medium of exchange?

Assuming that other things remain the same, what will happen to the interest on a bond as the bond's maturity increases?

Which of the following equations will always represent GDP in an open economy?

Figure 8-1 -Refer to Figure 8-1. Which of the graphs in the figure shows the effects of an increase in the tax rate on saving?

Which of the following is the primary advantage of mutual funds?

Table 8-2. -Refer to Table 8-2. Which company had the lowest earnings per share?

Which of the following would most likely happen in the market for loanable funds if the government were to decrease the tax on interest income?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 8: Saving, Investment, and the Financial System

Which of the following is both a store of value and a common medium of exchange?

Assuming that other things remain the same, what will happen to the interest on a bond as the bond's maturity increases?

Which of the following equations will always represent GDP in an open economy?

Figure 8-1 -Refer to Figure 8-1. Which of the graphs in the figure shows the effects of an increase in the tax rate on saving?

Which of the following is the primary advantage of mutual funds?

Table 8-2. -Refer to Table 8-2. Which company had the lowest earnings per share?

Which of the following would most likely happen in the market for loanable funds if the government were to decrease the tax on interest income?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters