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

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GDP is the value of consumption spending _____ investment spending _____ government purchases _____ the value of exports _____ spending on imports.

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Governments can save when:

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Which of the following do economists view as investment spending?

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In a closed economy, national savings equals private savings:

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Financial intermediaries that manage a stock portfolio and sell shares of the portfolio to individual investors are:

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Assuming a positive interest rate, the dollar amount of a future payment is:

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Most of Facebook's investment spending is for scholarships for its employees to study the latest social media technology.

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Use the following to answer questions : Figure: Crowding Out Use the following to answer questions : Figure: Crowding Out   -(Figure: Crowding Out) Look at the figure Crowding Out. If the demand for loanable funds curve shifts to the right, the result will be a(n) _____ in the interest rate and a(n) _____ in the total amount of borrowing in the funds market. -(Figure: Crowding Out) Look at the figure Crowding Out. If the demand for loanable funds curve shifts to the right, the result will be a(n) _____ in the interest rate and a(n) _____ in the total amount of borrowing in the funds market.

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Compare stocks and bonds with respect to risk and return.

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If there is an increase in the government budget deficit, the _____ loanable funds will _____, interest rates will _____, and the amount of borrowing will _____.

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The most diversified portfolio in terms of risk is $100,000 worth of stock in:

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In lending to Vanessa, Alison expects the inflation rate to be 8% over the next year. Vanessa agrees to pay Alison a 10% interest rate on the loan, but Vanessa expects inflation to be 9%. If the actual inflation rate is 9%:

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The crowding-out effect is the negative effect of government budget deficits on private investment spending.

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This year, Alan purchases a home built in the 1950s. Alan's purchase:

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The primary function of the financial system is to channel funds from savers to investors.

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A budget surplus exists when:

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Which of the following is NOT one of the four main types of financial assets?

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Four types of financial intermediaries are:

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In a closed economy, the savings-investment spending identity is:

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Securitization is the process of setting up assets by pooling individual loans and selling shares in the pool.

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