Question 1

An increase in the demand for loanable funds, all other things unchanged, will ________ the interest rate.

Accepted Answer

A)  not change 
B)  increase 
C)  decrease 
D)  not affect 
A)  not change 
B)  increase 
C)  decrease 
D)  not affect B

Question 2

Use the following to answer question(s): Future Generations and Exhaustible Natural Resources
  
-(Exhibit: Future Generations and Exhaustible Natural Resources) S₁ is the current supply curve of an exhaustible resource.All other things unchanged, it is the current ________ of extracting the resource.

Accepted Answer

A)  MR 
B)  MP 
C)  MC 
D)  MRP 
A)  MR 
B)  MP 
C)  MC 
D)  MRP C

Question 3

Saving is income not spent on consumption.

Accepted Answer

A) True 
 B)False  True

Question 4

A decrease in the interest rate, all other things unchanged, ________ the supply of an exhaustible natural resource and ________ the current price of the resource.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 5

The present value of future payments depends on:

Accepted Answer

A)  the size of the payment. 
B)  the length of the time period. 
C)  the interest rate. 
D)  all of the above. 
A)  the size of the payment. 
B)  the length of the time period. 
C)  the interest rate. 
D)  all of the above.

Question 6

A bond is essentially the same thing as a stock.

Accepted Answer

A) True 
 B)False

Question 7

The amount by which any price exceeds the minimum price necessary to make a factor of production that is fixed in supply available is called:

Accepted Answer

A)  economic profit. 
B)  abnormal rent. 
C)  economic rent. 
D)  monopoly profit. 
A)  economic profit. 
B)  abnormal rent. 
C)  economic rent. 
D)  monopoly profit.

Question 8

The Case in Point on Betting on Natural Resource Prices indicated that exhaustible resource prices:

Accepted Answer

A)  keep increasing year in and year out. 
B)  keep decreasing year in and year out. 
C)  increase in developed countries and decrease in developing countries. 
D)  increase in some periods and decrease in others. 
A)  keep increasing year in and year out. 
B)  keep decreasing year in and year out. 
C)  increase in developed countries and decrease in developing countries. 
D)  increase in some periods and decrease in others.

Question 9

An increase in the demand for capital will increase the demand for loanable funds and reduce the interest rate.

Accepted Answer

A) True 
 B)False

Question 10

The present value of a future payment increases if the:

Accepted Answer

A)  period between the present and the future increases. 
B)  future payment decreases. 
C)  interest rate decreases. 
D)  stock market falls. 
A)  period between the present and the future increases. 
B)  future payment decreases. 
C)  interest rate decreases. 
D)  stock market falls.

Question 11

Discuss the views of the Cornucopians and the Malthusians concerning the exhaustibility of natural resources.

Accepted Answer

The Cornucopians and the Malthusians hav

Question 12

From 1980 to 2015, the prices of oil, coal, copper, and zinc:

Accepted Answer

A)  continuously increased because they are exhaustible resources. 
B)  continuously decreased because they are non-exhaustible resources. 
C)  generally fell from 1980 to 2000, then rose from 2000 to 2010, and then fell again. 
D)  generally rose from 1980 to 2015. 
A)  continuously increased because they are exhaustible resources. 
B)  continuously decreased because they are non-exhaustible resources. 
C)  generally fell from 1980 to 2000, then rose from 2000 to 2010, and then fell again. 
D)  generally rose from 1980 to 2015.

Question 13

Given an interest rate of 3 percent, the present value of a future payment of $2,080 to be paid in one year is:

Accepted Answer

A)  $1,904.76 
B)  $2,000.00 
C)  $2,019.42 
D)  $2,080.00 
A)  $1,904.76 
B)  $2,000.00 
C)  $2,019.42 
D)  $2,080.00

Question 14

In the short run, capital is generally treated as a(n) ________ factor of production.

Accepted Answer

A)  variable 
B)  fixed 
C)  irrelevant 
D)  B and C are true. 
A)  variable 
B)  fixed 
C)  irrelevant 
D)  B and C are true.

Question 15

The market in which borrowers and lenders meet is called the:

Accepted Answer

A)  loanable funds market. 
B)  money market. 
C)  stock market. 
D)  product market. 
A)  loanable funds market. 
B)  money market. 
C)  stock market. 
D)  product market.

Question 16

Because of the income and substitution effects, a higher interest rate ________ current consumption and _______ current saving of a consumer.

Accepted Answer

A)  will definitely increase; will definitely decrease 
B)  will definitely decrease; will definitely increase 
C)  may increase or decrease; will definitely increase 
D)  may increase or decrease; may increase or decrease 
A)  will definitely increase; will definitely decrease 
B)  will definitely decrease; will definitely increase 
C)  may increase or decrease; will definitely increase 
D)  may increase or decrease; may increase or decrease

Question 17

If you are paid $10,500 in one year on a $10,000 loan made today, then your interest rate is:

Accepted Answer

A)  0%. 
B)  5%. 
C)  $500. 
D)  $10,000. 
A)  0%. 
B)  5%. 
C)  $500. 
D)  $10,000.

Question 18

Capital goods are:

Accepted Answer

A)  financial assets. 
B)  natural resources. 
C)  goods used to produce other goods or services. 
D)  described by none of the above. 
A)  financial assets. 
B)  natural resources. 
C)  goods used to produce other goods or services. 
D)  described by none of the above.

Question 19

The Case in Point on terminal illness and life insurance makes the point that:

Accepted Answer

A)  people who are terminally ill are taken advantage of by financial investors who purchase their life insurance policies. 
B)  most states outlaw the viatical industry because the companies that purchase the life insurance policies of terminally ill patients don't have the funds to pay the premiums. 
C)  viatical firms and financial investors share a win-win situation with terminally ill patients with whom they do business. 
D)  a financial investor who pays more than 80 percent of the face value of an insurance policy is probably dealing with a patient that has a good chance of recovering from his or her illness. 
A)  people who are terminally ill are taken advantage of by financial investors who purchase their life insurance policies. 
B)  most states outlaw the viatical industry because the companies that purchase the life insurance policies of terminally ill patients don't have the funds to pay the premiums. 
C)  viatical firms and financial investors share a win-win situation with terminally ill patients with whom they do business. 
D)  a financial investor who pays more than 80 percent of the face value of an insurance policy is probably dealing with a patient that has a good chance of recovering from his or her illness.

Question 20

The present value of all revenues minus the present value of all costs associated with an asset is:

Accepted Answer

A)  market value. 
B)  net present value. 
C)  gross domestic value. 
D)  the interest rate. 
A)  market value. 
B)  net present value. 
C)  gross domestic value. 
D)  the interest rate.

An increase in the demand for loanable funds, all other things unchanged, will ________ the interest rate.

Saving is income not spent on consumption.

A decrease in the interest rate, all other things unchanged, the supply of an exhaustible natural resource and the current price of the resource.

The present value of future payments depends on:

A bond is essentially the same thing as a stock.

The amount by which any price exceeds the minimum price necessary to make a factor of production that is fixed in supply available is called:

The Case in Point on Betting on Natural Resource Prices indicated that exhaustible resource prices:

An increase in the demand for capital will increase the demand for loanable funds and reduce the interest rate.

The present value of a future payment increases if the:

Discuss the views of the Cornucopians and the Malthusians concerning the exhaustibility of natural resources.

From 1980 to 2015, the prices of oil, coal, copper, and zinc:

Given an interest rate of 3 percent, the present value of a future payment of $2,080 to be paid in one year is:

In the short run, capital is generally treated as a(n) ________ factor of production.

The market in which borrowers and lenders meet is called the:

Because of the income and substitution effects, a higher interest rate __ current consumption and _ current saving of a consumer.

If you are paid $10,500 in one year on a $10,000 loan made today, then your interest rate is:

Capital goods are:

The Case in Point on terminal illness and life insurance makes the point that:

The present value of all revenues minus the present value of all costs associated with an asset is:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 13: Interest Rates and the Markets for Capital and Natural Resources

An increase in the demand for loanable funds, all other things unchanged, will ________ the interest rate.

Saving is income not spent on consumption.

A decrease in the interest rate, all other things unchanged, ________ the supply of an exhaustible natural resource and ________ the current price of the resource.

The present value of future payments depends on:

A bond is essentially the same thing as a stock.

The amount by which any price exceeds the minimum price necessary to make a factor of production that is fixed in supply available is called:

The Case in Point on Betting on Natural Resource Prices indicated that exhaustible resource prices:

An increase in the demand for capital will increase the demand for loanable funds and reduce the interest rate.

The present value of a future payment increases if the:

Discuss the views of the Cornucopians and the Malthusians concerning the exhaustibility of natural resources.

From 1980 to 2015, the prices of oil, coal, copper, and zinc:

Given an interest rate of 3 percent, the present value of a future payment of $2,080 to be paid in one year is:

In the short run, capital is generally treated as a(n) ________ factor of production.

The market in which borrowers and lenders meet is called the:

Because of the income and substitution effects, a higher interest rate ________ current consumption and _______ current saving of a consumer.

If you are paid $10,500 in one year on a $10,000 loan made today, then your interest rate is:

Capital goods are:

The Case in Point on terminal illness and life insurance makes the point that:

The present value of all revenues minus the present value of all costs associated with an asset is:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

A decrease in the interest rate, all other things unchanged, the supply of an exhaustible natural resource and the current price of the resource.

Because of the income and substitution effects, a higher interest rate __ current consumption and _ current saving of a consumer.