Exam 13: Saving Investment and the Financial System: Part B

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Lenders buy bonds and borrowers sell them.

(True/False)

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(82)

Question 21

The sale of either stocks or bonds to raise money is known as equity finance.

(True/False)

5.0/5

(70)

Question 22

If,for an imaginary closed economy,investment amounts to $12,000 and the government is running a $2,000 deficit,then private saving must amount to $10,000.

(True/False)

4.8/5

(73)

Question 23

Suppose a small closed economy has GDP of $5 billion,consumption of $3 billion,and government expenditures of $1 billion.Then investment and national saving are both $1 billion.

(True/False)

4.8/5

(68)

Question 24

When an economy's government goes from running a budget deficit to running a budget surplus,the economy's long-run growth prospects are improved.

(True/False)

4.8/5

(86)

Question 25

National saving is equal to Y - T - C.

(True/False)

4.9/5

(82)

Question 26

Public saving is equal to national saving minus private saving.

(True/False)

4.9/5

(84)

Question 27

The ratio of government debt to GDP was higher during the Reagan presidency than at any previous time in U.S.history.

(True/False)

4.9/5

(69)

Question 28

All financial intermediaries are financial institutions,but not all financial institutions are financial intermediaries.

(True/False)

4.8/5

(77)

Question 29

When the government budget deficit rises,national saving is reduced,interest rates rise,and investment falls.

(True/False)

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(67)

Question 30

Credit risk refers to the probability that the issuer of a bond will fail to pay some or all of the interest or principal.

(True/False)

4.7/5

(77)

Question 31

When a firm wants to borrow directly from the public to finance the purchase of new equipment,it does so by selling bonds.

(True/False)

4.7/5

(75)

Question 32

Most entrepreneurs finance their purchases of real capital using their past saving.

(True/False)

4.9/5

(82)

Question 33

When a corporation experiences financial problems,bondholders are paid before stockholders.

(True/False)

4.8/5

(79)

Question 34

If a share of stock in Skylight Chili sells for $75,the retained earnings per share are $5,and the dividend per share is $2,then the price-earnings ratio is 15.

(True/False)

4.9/5

(92)

Question 35

The term loanable funds refers to all income that is not used for consumption.

(True/False)

4.8/5

(69)

Question 36

If people become less optimistic about the future earnings of Hyde Park Jazz Studio,then the price of the company's stock will fall.

(True/False)

4.9/5

(77)

Question 37

Managed mutual funds perform better on average than index funds because stock prices are usually a good predictor of a company's true value.

(True/False)

4.9/5

(82)

Question 38

To state that public saving is equal to investment,for a closed economy,is to state an accounting identity.

(True/False)

4.9/5

(78)

Question 39

The demand for loanable funds comes from saving and the supply of loanable funds comes from investment.

(True/False)

4.9/5

(76)

Question 40

Showing 21 - 40 of 63

Exam 13: Saving Investment and the Financial System: Part B

Lenders buy bonds and borrowers sell them.

The sale of either stocks or bonds to raise money is known as equity finance.

If,for an imaginary closed economy,investment amounts to $12,000 and the government is running a $2,000 deficit,then private saving must amount to $10,000.

Suppose a small closed economy has GDP of $5 billion,consumption of $3 billion,and government expenditures of $1 billion.Then investment and national saving are both $1 billion.

When an economy's government goes from running a budget deficit to running a budget surplus,the economy's long-run growth prospects are improved.

National saving is equal to Y - T - C.

Public saving is equal to national saving minus private saving.

The ratio of government debt to GDP was higher during the Reagan presidency than at any previous time in U.S.history.

All financial intermediaries are financial institutions,but not all financial institutions are financial intermediaries.

When the government budget deficit rises,national saving is reduced,interest rates rise,and investment falls.

Credit risk refers to the probability that the issuer of a bond will fail to pay some or all of the interest or principal.

When a firm wants to borrow directly from the public to finance the purchase of new equipment,it does so by selling bonds.

Most entrepreneurs finance their purchases of real capital using their past saving.

When a corporation experiences financial problems,bondholders are paid before stockholders.

If a share of stock in Skylight Chili sells for $75,the retained earnings per share are $5,and the dividend per share is $2,then the price-earnings ratio is 15.

The term loanable funds refers to all income that is not used for consumption.

If people become less optimistic about the future earnings of Hyde Park Jazz Studio,then the price of the company's stock will fall.

Managed mutual funds perform better on average than index funds because stock prices are usually a good predictor of a company's true value.

To state that public saving is equal to investment,for a closed economy,is to state an accounting identity.

The demand for loanable funds comes from saving and the supply of loanable funds comes from investment.

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion