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

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The conventions of national income accounting imply that saving and investment are equal for the economy as a whole and for individual households and firms.

(True/False)

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Question 41

An increase in the demand for loanable funds increases the equilibrium interest rate and increases the equilibrium level of saving.

(True/False)

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Question 42

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

(True/False)

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Question 43

Corporations receive no proceeds from the resale of their stock.

(True/False)

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Question 44

An increase in the demand for loanable funds increases the equilibrium interest rate and decreases the equilibrium level of saving.

(True/False)

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Question 45

If Congress instituted an investment tax credit,the demand for loanable funds would shift rightward.

(True/False)

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Question 46

Index funds are financial intermediaries,but municipal bonds are not.

(True/False)

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Question 47

The financial system coordinates investment and saving,which are important determinants of long-run real GDP.

(True/False)

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Question 48

A decrease in taxes on interest income would increase the interest rate.

(True/False)

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Question 49

If a share of stock in Dell sells for $70,the retained earnings per share are $5,and the dividend per share is $2,then the price-earnings ratio is 10.

(True/False)

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Question 50

Banks and mutual funds are examples of financial markets.

(True/False)

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Question 51

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

(True/False)

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Question 52

Because of differences in tax treatment,municipal bonds pay a higher interest rate than do corporate bonds.

(True/False)

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Question 53

We interpret the term loanable funds to mean the flow of resources available to fund private investment.

(True/False)

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Question 54

Owners of bonds that were issued by the federal government are not required to pay federal income tax on the interest income.

(True/False)

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Question 55

By definition,government purchases and taxes are zero for a closed economy.

(True/False)

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Question 56

Public saving is T - G,while private saving is Y - T - C.

(True/False)

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Question 57

Other things the same,corporate bonds generally feature higher interest rates than U.S.government bonds.

(True/False)

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Question 58

Mutual funds are a type of financial intermediary.

(True/False)

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Question 59

Skeptics of government policy to reduce taxes on saving argue that it would primarily benefit the rich.

(True/False)

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Question 60

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

The conventions of national income accounting imply that saving and investment are equal for the economy as a whole and for individual households and firms.

An increase in the demand for loanable funds increases the equilibrium interest rate and increases the equilibrium level of saving.

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

Corporations receive no proceeds from the resale of their stock.

An increase in the demand for loanable funds increases the equilibrium interest rate and decreases the equilibrium level of saving.

If Congress instituted an investment tax credit,the demand for loanable funds would shift rightward.

Index funds are financial intermediaries,but municipal bonds are not.

The financial system coordinates investment and saving,which are important determinants of long-run real GDP.

A decrease in taxes on interest income would increase the interest rate.

If a share of stock in Dell sells for $70,the retained earnings per share are $5,and the dividend per share is $2,then the price-earnings ratio is 10.

Banks and mutual funds are examples of financial markets.

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

Because of differences in tax treatment,municipal bonds pay a higher interest rate than do corporate bonds.

We interpret the term loanable funds to mean the flow of resources available to fund private investment.

Owners of bonds that were issued by the federal government are not required to pay federal income tax on the interest income.

By definition,government purchases and taxes are zero for a closed economy.

Public saving is T - G,while private saving is Y - T - C.

Other things the same,corporate bonds generally feature higher interest rates than U.S.government bonds.

Mutual funds are a type of financial intermediary.

Skeptics of government policy to reduce taxes on saving argue that it would primarily benefit the rich.

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