Question 1

Indirect financing involves the use of securities that represent specific contracts between the savers and borrowers themselves.
Not in chapter

Accepted Answer

A) True 
 B)False

Question 2

When current savings of an economic unit exceed its direct investment in real assets,

Accepted Answer

A) more funds are needed by the economic unit 
B) funds can be made available to a savings deficit unit 
C) interest rates will rise
The firm has undistributed profits 
A) more funds are needed by the economic unit 
B) funds can be made available to a savings deficit unit 
C) interest rates will rise
The firm has undistributed profits

Question 3

Consumption is reflected by the sum of personal consumption expenditures and government purchases of goods and services.
Too fine a distinction between C vs PCE, IMHO

Accepted Answer

A) True 
 B)False

Question 4

What type of investment occurs when claims to wealth in the form of real assets are created or acquired?

Accepted Answer

A) financial investment 
B) real investment 
C) contractual investment 
D) voluntary investment 
A) financial investment 
B) real investment 
C) contractual investment 
D) voluntary investment

Question 5

The accumulation of reserves in insurance and pension funds is referred to as what type of savings?

Accepted Answer

A) voluntary savings 
B) forced savings 
C) real savings 
D) none of the above 
A) voluntary savings 
B) forced savings 
C) real savings 
D) none of the above

Question 6

Which of the following is not a stage in the individual savings life cycle?

Accepted Answer

A) Career starting/family creating 
B) Formative/education developing 
C) Death planning 
D) Retirement enjoying 
E) Wealth building 
A) Career starting/family creating 
B) Formative/education developing 
C) Death planning 
D) Retirement enjoying 
E) Wealth building

Question 7

A business deposit in a commercial bank represents?

Accepted Answer

A) a liability of the bank and an asset to the business 
B) an asset of the bank and a liability to the business 
C) liability to the bank and capital to the business 
D) liability to Joe's and capital to the business 
A) a liability of the bank and an asset to the business 
B) an asset of the bank and a liability to the business 
C) liability to the bank and capital to the business 
D) liability to Joe's and capital to the business

Question 8

When taxes and general revenues fail to meet expenditures, a budgetary deficit occurs.

Accepted Answer

A) True 
 B)False

Question 9

Early developments in transportation were ultimately financed by:

Accepted Answer

A) private promoters 
B) current government revenues 
C) savings of individuals 
D) foreign securities 
A) private promoters 
B) current government revenues 
C) savings of individuals 
D) foreign securities

Question 10

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 11

Government-held reserves which are invested primarily in the in the obligations of federal, local, and state governments include:

Accepted Answer

A) life insurance 
B) pension funds 
C) retirement funds 
D) money market funds 
A) life insurance 
B) pension funds 
C) retirement funds 
D) money market funds

Question 12

A saver who chooses securities as a savings medium and desires maximum growth of principal buys:

Accepted Answer

A) public utility stocks 
B) corporate stocks 
C) high-grade corporate bonds 
D) government bonds 
A) public utility stocks 
B) corporate stocks 
C) high-grade corporate bonds 
D) government bonds

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Estimates of "using up" plant and equipment for business purposes are called

Accepted Answer

A) accelerated depreciation estimates 
B) gross capital formations 
C) capital consumption adjustments 
D) none of the above 
A) accelerated depreciation estimates 
B) gross capital formations 
C) capital consumption adjustments 
D) none of the above

Question 15

Gross investment may or may not equal gross savings.
So what is it asking? Not sure this is directly mentioned in the text, either.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements factors contributed to the 2007-2009 financial crisis?

Accepted Answer

A) The cultural shift that allowed the public to "spend now and pay later"-rather than their parents' or grandparents' philosophy of "save now, spend later" led to increases in consumer debt levels. 
B) U.S.government officials engaged in efforts to expand home ownership by encouraging lenders to make mortgage loans available to a broader spectrum of individuals. 
C) Federal fiscal policy also became simulative, with increased government spending and the passage of tax cuts in 2002. 
D) The Federal Reserve adopted an expansionary monetary policy characterized by very low interest rates. 
E) all of the above. 
A) The cultural shift that allowed the public to "spend now and pay later"-rather than their parents' or grandparents' philosophy of "save now, spend later" led to increases in consumer debt levels. 
B) U.S.government officials engaged in efforts to expand home ownership by encouraging lenders to make mortgage loans available to a broader spectrum of individuals. 
C) Federal fiscal policy also became simulative, with increased government spending and the passage of tax cuts in 2002. 
D) The Federal Reserve adopted an expansionary monetary policy characterized by very low interest rates. 
E) all of the above.

Question 17

If individuals believe their income will decrease in the near future, they may _____________ their spending.

Accepted Answer

A) Eliminate 
B) Curtail 
C) Increase 
D) Double 
E) Not change 
A) Eliminate 
B) Curtail 
C) Increase 
D) Double 
E) Not change

Question 18

All of the following encouraged individuals to enter into risky mortgages during the 2000's EXCEPT:

Accepted Answer

A) Financial institution lenders 
B) Local government officials 
C) Government-supported agencies 
D) Mortgage originators 
E) Federal government officials 
A) Financial institution lenders 
B) Local government officials 
C) Government-supported agencies 
D) Mortgage originators 
E) Federal government officials

Question 19

Direct payments to individuals from the Federal government do not include:

Accepted Answer

A) Social Security payments. 
B) Medicare payments 
C) health expenditures 
D) all the above are included 
E) none of the above 
A) Social Security payments. 
B) Medicare payments 
C) health expenditures 
D) all the above are included 
E) none of the above

Question 20

Corporate saving for short-term working capital purposes is the most important reason for businesses accumulating financial assets.

Accepted Answer

A) True 
 B)False

Indirect financing involves the use of securities that represent specific contracts between the savers and borrowers themselves. Not in chapter

When current savings of an economic unit exceed its direct investment in real assets,

Consumption is reflected by the sum of personal consumption expenditures and government purchases of goods and services. Too fine a distinction between C vs PCE, IMHO

What type of investment occurs when claims to wealth in the form of real assets are created or acquired?

The accumulation of reserves in insurance and pension funds is referred to as what type of savings?

Which of the following is not a stage in the individual savings life cycle?

A business deposit in a commercial bank represents?

When taxes and general revenues fail to meet expenditures, a budgetary deficit occurs.

Early developments in transportation were ultimately financed by:

Which of the following statements is most correct?

Government-held reserves which are invested primarily in the in the obligations of federal, local, and state governments include:

A saver who chooses securities as a savings medium and desires maximum growth of principal buys:

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

Estimates of "using up" plant and equipment for business purposes are called

Gross investment may or may not equal gross savings. So what is it asking? Not sure this is directly mentioned in the text, either.

Which of the following statements factors contributed to the 2007-2009 financial crisis?

If individuals believe their income will decrease in the near future, they may _____________ their spending.

All of the following encouraged individuals to enter into risky mortgages during the 2000's EXCEPT:

Direct payments to individuals from the Federal government do not include:

Corporate saving for short-term working capital purposes is the most important reason for businesses accumulating financial assets.

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

Indirect financing involves the use of securities that represent specific contracts between the savers and borrowers themselves. Not in chapter

When current savings of an economic unit exceed its direct investment in real assets,

Consumption is reflected by the sum of personal consumption expenditures and government purchases of goods and services. Too fine a distinction between C vs PCE, IMHO

What type of investment occurs when claims to wealth in the form of real assets are created or acquired?

The accumulation of reserves in insurance and pension funds is referred to as what type of savings?

Which of the following is not a stage in the individual savings life cycle?

A business deposit in a commercial bank represents?

When taxes and general revenues fail to meet expenditures, a budgetary deficit occurs.

Early developments in transportation were ultimately financed by:

Which of the following statements is most correct?

Government-held reserves which are invested primarily in the in the obligations of federal, local, and state governments include:

A saver who chooses securities as a savings medium and desires maximum growth of principal buys:

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

Estimates of "using up" plant and equipment for business purposes are called

Gross investment may or may not equal gross savings. So what is it asking? Not sure this is directly mentioned in the text, either.

Which of the following statements factors contributed to the 2007-2009 financial crisis?

If individuals believe their income will decrease in the near future, they may _____________ their spending.

All of the following encouraged individuals to enter into risky mortgages during the 2000's EXCEPT:

Direct payments to individuals from the Federal government do not include:

Corporate saving for short-term working capital purposes is the most important reason for businesses accumulating financial assets.

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