Exam 10: Savings, Investment Spending, and the Financial System

The main role of financial systems is to:

Financial assets with the highest risk are:

Owners of stock may receive income in the form of:

Financial assets that carry more risk:

Use the following to answer questions : Table: National Income Accounts -(Table: National Income Accounts) Look at the table National Income Accounts. The value of net capital inflow is:

Implicit rent is an estimate of the amount that homeowners would pay if they had to rent their home and is also an estimate of the benefit of owning a home.

Firms want to undertake projects whose rate of return is greater than the interest rate.

All other things unchanged, an increase in demand for loanable funds would most likely be caused by a(n):

All other things unchanged, a general decrease in the amount of government borrowing will typically:

A decrease in the demand for loanable funds would most likely be caused by a(n):

The market for loanable funds is in equilibrium. All else equal, the federal deficit is growing. Describe how this will affect the market for loanable funds, the equilibrium interest rate, and the equilibrium quantity of loanable funds.

Human capital development often comes from:

An amount that would equal a particular future value if deposited today at a specific interest rate is the:

National savings in a closed economy is all of the following EXCEPT:

A shift away from taxing asset income and toward taxing consumption would lead to:

The budget balance equals:

Financial markets spread the potential gains and losses of borrowing and lending operations among many individuals, therefore decreasing the overall uncertainty. This is an example of:

Capital inflow into a country is associated with:

Crowding out results in a(n):

When interest rates decrease, the demand for commercial and residential real estate will _____ and the price of real estate will _____.