Question 1

Years of budget surpluses during the Reagan and first Bush presidencies changed into deficits under the Clinton presidency.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is the most liquid form of savings?

Accepted Answer

A) cash balances 
B) time deposits 
C) insurance reserves 
D) securities 
A) cash balances 
B) time deposits 
C) insurance reserves 
D) securities

Question 3

Savings surplus occurs when an economic unit has current income that exceeds its direct investment in real assets.

Accepted Answer

A) True 
 B)False

Question 4

Private financial intermediation generally represents an important annual source of funds supplied to credit markets.Which of the following intermediaries has failed to supply funds during one or more recent years?

Accepted Answer

A) commercial banks 
B) thrift institutions 
C) insurance and pension funds 
D) other financial intermediaries 
A) commercial banks 
B) thrift institutions 
C) insurance and pension funds 
D) other financial intermediaries

Question 5

Gross domestic product is equal to the sum of all of the following EXCEPT:

Accepted Answer

A) personal consumption expenditures 
B) gross exports D is the answer as net exports are gross exports - imports.Could be confusing to students.Note the next item is identical to this one without the misleading term. 
C) government expenditures 
D) all of the above are included 
A) personal consumption expenditures 
B) gross exports D is the answer as net exports are gross exports - imports.Could be confusing to students.Note the next item is identical to this one without the misleading term. 
C) government expenditures 
D) all of the above are included

Question 6

The largest proportion of government revenue comes from corporate income taxes.

Accepted Answer

A) True 
 B)False

Question 7

The short-term accumulation of financial assets on the part of business corporations:

Accepted Answer

A) are held in short-term, safe, and liquid debt obligations 
B) add to the level of long-term savings of the economy as a whole 
C) do not enter the monetary stream to fund consumers, government, or other businesses 
D) are held in the form of long-term obligations of the federal government 
A) are held in short-term, safe, and liquid debt obligations 
B) add to the level of long-term savings of the economy as a whole 
C) do not enter the monetary stream to fund consumers, government, or other businesses 
D) are held in the form of long-term obligations of the federal government

Question 8

Which of the following statements is most correct?

Accepted Answer

A) Personal consumption expenditures of $10.1 billion in 2009 accounted for about 41 percent of GDP; this percentage relationship has been very stable throughout the decade of the 2000s. 
B) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 11 percent of GDP; this percentage relationship has been very stable throughout the decade of the 2000s. 
C) Personal consumption expenditures of $10.1 trillion in 2009 accounted for about 11 percent of GDP; this percentage relationship has been very unstable throughout the decade of the 2000s. 
D) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 71 percent of GDP; this percentage relationship has been very unstable throughout the decade of the 2000s. 
E) none of the above. 
A) Personal consumption expenditures of $10.1 billion in 2009 accounted for about 41 percent of GDP; this percentage relationship has been very stable throughout the decade of the 2000s. 
B) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 11 percent of GDP; this percentage relationship has been very stable throughout the decade of the 2000s. 
C) Personal consumption expenditures of $10.1 trillion in 2009 accounted for about 11 percent of GDP; this percentage relationship has been very unstable throughout the decade of the 2000s. 
D) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 71 percent of GDP; this percentage relationship has been very unstable throughout the decade of the 2000s. 
E) none of the above.

Question 9

The federal government relies primarily on income taxes and social insurance taxes for its revenues.

Accepted Answer

A) True 
 B)False

Question 10

A business loan to Joe's Hardware Store by a bank represents which of the following?

Accepted Answer

A) a liability of the bank and an asset to Joe's 
B) a liability of the bank and a liability to Joe's 
C) liability to the bank and capital to Joe's 
D) liability to Joe's and capital to the bank 
E) none of the above 
A) a liability of the bank and an asset to Joe's 
B) a liability of the bank and a liability to Joe's 
C) liability to the bank and capital to Joe's 
D) liability to Joe's and capital to the bank 
E) none of the above

Question 11

Which of the following represents the least important instrument used to raise funds in the credit markets during recent years?

Accepted Answer

A) U.S.government securities 
B) corporate bonds 
C) mortgages 
D) consumer debt 
A) U.S.government securities 
B) corporate bonds 
C) mortgages 
D) consumer debt

Question 12

The personal savings rate is calculated as:

Accepted Answer

A) personal savings divided by personal outlays 
B) personal savings divided by disposable personal income 
C) disposable personal income divided by personal outlays 
D) personal income divided by personal outlays 
A) personal savings divided by personal outlays 
B) personal savings divided by disposable personal income 
C) disposable personal income divided by personal outlays 
D) personal income divided by personal outlays

Question 13

Real assets include direct ownership of land, buildings, machinery, inventory, commodities and precious metals.
Not in chapter

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) voluntary savings 
B) contractual savings 
C) real savings 
D) all of the above 
A) voluntary savings 
B) contractual savings 
C) real savings 
D) all of the above

Question 15

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 
A) business firms 
B) financial intermediaries 
C) governments 
D) not-for-profit organizations

Question 16

All else the same, a trade deficit:

Accepted Answer

A) increases GDP 
B) decreases GDP 
C) have no impact on GDP 
D) none of the above 
A) increases GDP 
B) decreases GDP 
C) have no impact on GDP 
D) none of the above

Question 17

GDP includes personal consumption expenditures, government purchases of goods and services, gross private domestic investment, and net exports of goods and services.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is most correct?

Accepted Answer

A) Contractual savings include such things as accumulation of reserves in insurance and pension funds and deposits to time and savings accounts in commercial banks. 
B) As savings increased in the United States, there was a change in our status from a creditor nation to a debtor nation. 
C) In the U.S.economy, financial assets and financial liabilities are created when balancing savings surplus and savings deficit units. 
D) Corporate bonds and stocks are said to be indirect securities, while commercial bank time deposits would represent primary instruments in terms of the savings investment process. 
A) Contractual savings include such things as accumulation of reserves in insurance and pension funds and deposits to time and savings accounts in commercial banks. 
B) As savings increased in the United States, there was a change in our status from a creditor nation to a debtor nation. 
C) In the U.S.economy, financial assets and financial liabilities are created when balancing savings surplus and savings deficit units. 
D) Corporate bonds and stocks are said to be indirect securities, while commercial bank time deposits would represent primary instruments in terms of the savings investment process.

Question 19

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, remained unchanged at 2.4 percent from 2006 to 2009, due largely the economic stability during the period. 
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, remained unchanged at 2.4 percent from 2006 to 2009, due largely the economic stability during the period. 
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 20

A derivative security is a financial contract that derives its value from a bond, stock, or other asset.

Accepted Answer

A) True 
 B)False

Years of budget surpluses during the Reagan and first Bush presidencies changed into deficits under the Clinton presidency.

Which of the following is the most liquid form of savings?

Savings surplus occurs when an economic unit has current income that exceeds its direct investment in real assets.

Private financial intermediation generally represents an important annual source of funds supplied to credit markets.Which of the following intermediaries has failed to supply funds during one or more recent years?

Gross domestic product is equal to the sum of all of the following EXCEPT:

The largest proportion of government revenue comes from corporate income taxes.

The short-term accumulation of financial assets on the part of business corporations:

Which of the following statements is most correct?

The federal government relies primarily on income taxes and social insurance taxes for its revenues.

A business loan to Joe's Hardware Store by a bank represents which of the following?

Which of the following represents the least important instrument used to raise funds in the credit markets during recent years?

The personal savings rate is calculated as:

Real assets include direct ownership of land, buildings, machinery, inventory, commodities and precious metals. Not in chapter

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

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

All else the same, a trade deficit:

GDP includes personal consumption expenditures, government purchases of goods and services, gross private domestic investment, and net exports of goods and services.

Which of the following statements is most correct?

Which of the following statements is most correct?

A derivative security is a financial contract that derives its value from a bond, stock, or other asset.

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

Years of budget surpluses during the Reagan and first Bush presidencies changed into deficits under the Clinton presidency.

Which of the following is the most liquid form of savings?

Savings surplus occurs when an economic unit has current income that exceeds its direct investment in real assets.

Private financial intermediation generally represents an important annual source of funds supplied to credit markets.Which of the following intermediaries has failed to supply funds during one or more recent years?

Gross domestic product is equal to the sum of all of the following EXCEPT:

The largest proportion of government revenue comes from corporate income taxes.

The short-term accumulation of financial assets on the part of business corporations:

Which of the following statements is most correct?

The federal government relies primarily on income taxes and social insurance taxes for its revenues.

A business loan to Joe's Hardware Store by a bank represents which of the following?

Which of the following represents the least important instrument used to raise funds in the credit markets during recent years?

The personal savings rate is calculated as:

Real assets include direct ownership of land, buildings, machinery, inventory, commodities and precious metals. Not in chapter

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

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

All else the same, a trade deficit:

GDP includes personal consumption expenditures, government purchases of goods and services, gross private domestic investment, and net exports of goods and services.

Which of the following statements is most correct?

Which of the following statements is most correct?

A derivative security is a financial contract that derives its value from a bond, stock, or other asset.

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