Exam 7: Finance, Saving, and Investment

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 net investment for the year totaled

-Use the information in the table above to calculate the value of national saving.

If the real interest rate rises, people

Suppose a firm has an investment project which will cost $200,000 and result in $30,000 profit. The firm will not undertake the project if the interest rate is

According to the Ricardo-Barro effect

If a bank's net worth is negative, then the bank definitely is

The funds used to buy and operate physical capital are

The table below shows data for the United States. Between 2013 and 2014, the real interest rate ________ and caused a ________ the demand for loanable funds curve.

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

-In the above figure, technological progress that increases the expected profit will

National saving equals

A decrease in the real interest rate leads to

This year Pizza Hut makes a total investment of $1.3 billion in new stores. Its depreciation in this year is $300 million. Pizza Hut's gross investment is ________ and its net investment is ________.

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?

The real interest rate

Assume you save $1,000 in a bank account that pays 8 percent interest per year and the inflation rate is 3 percent. At the end of the year you have earned

A decrease in disposable income shifts the ________.

An increase in disposable income ________.

The capital stock increases whenever

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