Question 1

Which of the following statements is most correct?

Accepted Answer

A) While the dollar amount of imports decreased dramatically in 2006 compared to 2003, they actually increased in 2009 relative to the 2006 level; this development reflects the impact of the 2007-09 financial crisis and the weakening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
B) While the dollar amount of imports increased dramatically in 2006 over 2003, they actually fell in 2009 relative to the 2006 level; this development reflects the impact of the 2007-09 financial crisis and the weakening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
C) While the dollar amount of imports increased dramatically in 2006 over 2003, they actually fell in 2009 relative to the 2006 level; this development reflects the impact of the 2007-09 financial crisis and the strengthening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
D) While the dollar amount of imports decreased dramatically in 2006 compared to 2003, they actually fell in 2009 relative to the 2006 level; this development reflects the impact of the 2007-09 financial crisis and the strengthening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
E) none of the above. 
A) While the dollar amount of imports decreased dramatically in 2006 compared to 2003, they actually increased in 2009 relative to the 2006 level; this development reflects the impact of the 2007-09 financial crisis and the weakening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
B) While the dollar amount of imports increased dramatically in 2006 over 2003, they actually fell in 2009 relative to the 2006 level; this development reflects the impact of the 2007-09 financial crisis and the weakening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
C) While the dollar amount of imports increased dramatically in 2006 over 2003, they actually fell in 2009 relative to the 2006 level; this development reflects the impact of the 2007-09 financial crisis and the strengthening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
D) While the dollar amount of imports decreased dramatically in 2006 compared to 2003, they actually fell in 2009 relative to the 2006 level; this development reflects the impact of the 2007-09 financial crisis and the strengthening of the U.S.dollar relative to other major currencies as the decade of the 2000s came to a close. 
E) none of the above.

Question 2

Local governments depend heavily on property taxes for their revenues, while state governments depend largely on sales taxes and special taxes, such as those on tobacco products.

Accepted Answer

A) True 
 B)False

Question 3

The federal government relies primarily on borrowing to support its various expenditure programs.

Accepted Answer

A) True 
 B)False

Question 4

Savings surplus occurs when all of an economic unit's income is not consumed, but held in the form of cash and other financial assets.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is most correct?

Accepted Answer

A) Capital formation was $1.6 trillion in 2009 up from $2.2 billion for 2006 largely due to the steep rise in home prices; in addition, the change in private inventories for 2009 was -$125 billion reflecting the severity of the financial crisis of 2007-09. 
B) Capital formation was $1.6 billion in 2009 down from $2.2 trillion for 2006 largely due to the steep decline in home prices; in addition, the change in private inventories for 2009 was +$125 billion reflecting the severity of the financial crisis of 2007-09. 
C) Capital formation was $1.6 trillion in 2009 down from $2.2 trillion for 2006 largely due to the steep decline in home prices; in addition, the change in private inventories for 2009 was -$125 billion reflecting the severity of the financial crisis of 2007-09. 
D) Capital formation was $1.6 million in 2009 down from $2.2 million for 2006 largely due to the steep decline in home prices; in addition, the change in private inventories for 2009 was -$125 million reflecting the severity of the financial crisis of 2007-09. 
E) none of the above. 
A) Capital formation was $1.6 trillion in 2009 up from $2.2 billion for 2006 largely due to the steep rise in home prices; in addition, the change in private inventories for 2009 was -$125 billion reflecting the severity of the financial crisis of 2007-09. 
B) Capital formation was $1.6 billion in 2009 down from $2.2 trillion for 2006 largely due to the steep decline in home prices; in addition, the change in private inventories for 2009 was +$125 billion reflecting the severity of the financial crisis of 2007-09. 
C) Capital formation was $1.6 trillion in 2009 down from $2.2 trillion for 2006 largely due to the steep decline in home prices; in addition, the change in private inventories for 2009 was -$125 billion reflecting the severity of the financial crisis of 2007-09. 
D) Capital formation was $1.6 million in 2009 down from $2.2 million for 2006 largely due to the steep decline in home prices; in addition, the change in private inventories for 2009 was -$125 million reflecting the severity of the financial crisis of 2007-09. 
E) none of the above.

Question 6

Which one the following four basic economic units consistently represents a savings surplus unit?

Accepted Answer

A) foreigners 
B) business firms 
C) financial intermediaries 
D) governments 
E) none of the above None of the above clone of prior item. 
A) foreigners 
B) business firms 
C) financial intermediaries 
D) governments 
E) none of the above None of the above clone of prior item.

Question 7

Capital formation refers to the:

Accepted Answer

A) total accumulation of monetary savings in the nation 
B) distribution of savings among thrift institutions 
C) total of capital stockequity accounts with business corporations 
D) creation of physical productive facilities 
A) total accumulation of monetary savings in the nation 
B) distribution of savings among thrift institutions 
C) total of capital stockequity accounts with business corporations 
D) creation of physical productive facilities

Question 8

Which of the following is an example of indirect financing?

Accepted Answer

A) corporate bonds 
B) corporate stocks 
C) business bank loans 
D) U.S.government bonds 
A) corporate bonds 
B) corporate stocks 
C) business bank loans 
D) U.S.government bonds

Question 9

In general, during the business cycle, when economic activity is peaking:

Accepted Answer

A) interest rates begin to creep higher 
B) unemployment levels are low 
C) inflation begins to edge higher 
D) all of the above 
A) interest rates begin to creep higher 
B) unemployment levels are low 
C) inflation begins to edge higher 
D) all of the above

Question 10

Which of the following statements is most correct?

Accepted Answer

A) The personal savings rate in the United States, which is personal savings as a percentage of disposable personal income, increased from 2.4 percent to 4.6 percent from 2006 to 2009, due largely to the fact that individuals began to save more because of the economic uncertainties created by the financial crisis of 2007-09. 
B) The personal savings rate in the United States, which is personal savings as a percentage of disposable personal income, decreased from 4.6 percent to 2.4 percent from 2006 to 2009, due largely to the fact that individuals began to spend more because of the economic realities created by the financial crisis of 2007-09. 
C) The personal savings rate in the United States, which is personal savings as a percentage of disposable personal income, increased from 10.1 percent to 20.5 percent from 2006 to 2009, due largely to the fact that individuals began to save more because of the economic uncertainties created by the financial crisis of 2007-09. 
D) The personal savings rate in the United States, which is personal savings as a percentage of disposable personal income, declined from 45 percent to 40 percent from 2006 to 2009, due largely to the fact that individuals began to spend more because of the economic realities created by the financial crisis of 2007-09. 
E) none of the above. 
A) The personal savings rate in the United States, which is personal savings as a percentage of disposable personal income, increased from 2.4 percent to 4.6 percent from 2006 to 2009, due largely to the fact that individuals began to save more because of the economic uncertainties created by the financial crisis of 2007-09. 
B) The personal savings rate in the United States, which is personal savings as a percentage of disposable personal income, decreased from 4.6 percent to 2.4 percent from 2006 to 2009, due largely to the fact that individuals began to spend more because of the economic realities created by the financial crisis of 2007-09. 
C) The personal savings rate in the United States, which is personal savings as a percentage of disposable personal income, increased from 10.1 percent to 20.5 percent from 2006 to 2009, due largely to the fact that individuals began to save more because of the economic uncertainties created by the financial crisis of 2007-09. 
D) The personal savings rate in the United States, which is personal savings as a percentage of disposable personal income, declined from 45 percent to 40 percent from 2006 to 2009, due largely to the fact that individuals began to spend more because of the economic realities created by the financial crisis of 2007-09. 
E) none of the above.

Question 11

Direct securities:

Accepted Answer

A) are contracts between savers and institutions 
B) are deposited directly into an investor's account 
C) represent the financial asset of the borrower and the claim on the saver 
D) represent the claim on the institution 
E) none of the above 
A) are contracts between savers and institutions 
B) are deposited directly into an investor's account 
C) represent the financial asset of the borrower and the claim on the saver 
D) represent the claim on the institution 
E) none of the above

Question 12

Contractual savings are financial assets set aside for use in the future.

Accepted Answer

A) True 
 B)False

Question 13

Greater potential savings would result from a (n):

Accepted Answer

A) age distribution shift to more teenagers 
B) shift to more elderly people in the total population 
C) shift to more young married couples 
D) shift to more middle-aged families 
A) age distribution shift to more teenagers 
B) shift to more elderly people in the total population 
C) shift to more young married couples 
D) shift to more middle-aged families

Question 14

The largest category of federal budget outlays is from

Accepted Answer

A) national defense 
B) Medicare and social security 
C) Interest on the federal debt 
D) international affairs 
A) national defense 
B) Medicare and social security 
C) Interest on the federal debt 
D) international affairs

Question 15

The personal savings rate is calculated as:

Accepted Answer

A) personal savings divided by personal outlays 
B) personal savings multiplied by disposable personal income 
C) disposable personal income divided by personal outlays 
D) personal income divided by personal outlays 
E) none of the above 
A) personal savings divided by personal outlays 
B) personal savings multiplied by disposable personal income 
C) disposable personal income divided by personal outlays 
D) personal income divided by personal outlays 
E) none of the above

Question 16

Which of the following statements is most correct?

Accepted Answer

A) The federal government has produced annual budget deficits for all years but four, when it ran consecutive budget surpluses that began in 1986 during the Reagan administration. 
B) The federal government has produced annual budget deficits for all years but four, when it ran consecutive budget surpluses that began in 1990 during the George H.W.Bush administration. 
C) The federal government has produced annual budget deficits for all years but four, when it ran consecutive budget surpluses that began in 2002 during the George W.Bush administration. 
D) The federal government has produced annual budget deficits for all years but four, when it ran consecutive budget surpluses that began in 1978 during the Carter administration. 
E) none of the above. 
A) The federal government has produced annual budget deficits for all years but four, when it ran consecutive budget surpluses that began in 1986 during the Reagan administration. 
B) The federal government has produced annual budget deficits for all years but four, when it ran consecutive budget surpluses that began in 1990 during the George H.W.Bush administration. 
C) The federal government has produced annual budget deficits for all years but four, when it ran consecutive budget surpluses that began in 2002 during the George W.Bush administration. 
D) The federal government has produced annual budget deficits for all years but four, when it ran consecutive budget surpluses that began in 1978 during the Carter administration. 
E) none of the above.

Question 17

Which of the following could affect personal income levels?

Accepted Answer

A) Employment Levels 
B) Corporate profits 
C) Inflation 
D) Liquidity 
E) Cost of Living 
A) Employment Levels 
B) Corporate profits 
C) Inflation 
D) Liquidity 
E) Cost of Living

Question 18

Capital consumption allowances are estimates of the "using up" of plant equipment assets for businesses.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following categories is not considered to be one of the four basic economic units in the U.S.financial system?

Accepted Answer

A) business firms 
B) financial intermediaries 
C) governments 
D) not-for-profit organizations 
E) all are considered among the four basic economic units of the financial system 
A) business firms 
B) financial intermediaries 
C) governments 
D) not-for-profit organizations 
E) all are considered among the four basic economic units of the financial system

Question 20

BDirect benefit payments for individuals amount to over half of total expenditures of the federal government.

Accepted Answer

A) True 
 B)False

Which of the following statements is most correct?

Local governments depend heavily on property taxes for their revenues, while state governments depend largely on sales taxes and special taxes, such as those on tobacco products.

The federal government relies primarily on borrowing to support its various expenditure programs.

Savings surplus occurs when all of an economic unit's income is not consumed, but held in the form of cash and other financial assets.

Which of the following statements is most correct?

Which one the following four basic economic units consistently represents a savings surplus unit?

Capital formation refers to the:

Which of the following is an example of indirect financing?

In general, during the business cycle, when economic activity is peaking:

Which of the following statements is most correct?

Direct securities:

Contractual savings are financial assets set aside for use in the future.

Greater potential savings would result from a (n):

The largest category of federal budget outlays is from

The personal savings rate is calculated as:

Which of the following statements is most correct?

Which of the following could affect personal income levels?

Capital consumption allowances are estimates of the "using up" of plant equipment assets for businesses.

Which of the following categories is not considered to be one of the four basic economic units in the U.S.financial system?

BDirect benefit payments for individuals amount to over half of total expenditures of the federal government.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 7: Savings and Investment Process

Which of the following statements is most correct?

Local governments depend heavily on property taxes for their revenues, while state governments depend largely on sales taxes and special taxes, such as those on tobacco products.

The federal government relies primarily on borrowing to support its various expenditure programs.

Savings surplus occurs when all of an economic unit's income is not consumed, but held in the form of cash and other financial assets.

Which of the following statements is most correct?

Which one the following four basic economic units consistently represents a savings surplus unit?

Capital formation refers to the:

Which of the following is an example of indirect financing?

In general, during the business cycle, when economic activity is peaking:

Which of the following statements is most correct?

Direct securities:

Contractual savings are financial assets set aside for use in the future.

Greater potential savings would result from a (n):

The largest category of federal budget outlays is from

The personal savings rate is calculated as:

Which of the following statements is most correct?

Which of the following could affect personal income levels?

Capital consumption allowances are estimates of the "using up" of plant equipment assets for businesses.

Which of the following categories is not considered to be one of the four basic economic units in the U.S.financial system?

BDirect benefit payments for individuals amount to over half of total expenditures of the federal government.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters