Question 1

Other things equal, which of the following is the result of increased saving?

Accepted Answer

A) ​a decrease in interest rates 
B) ​a decrease in prices 
C) ​forgone consumption 
D) ​all of the above 
A) ​a decrease in interest rates 
B) ​a decrease in prices 
C) ​forgone consumption 
D) ​all of the above

Question 2

Which of the following is not true regarding bonds?

Accepted Answer

A) ​Bonds can be purchased from corporations as well as governments. 
B) ​Interest must be paid to bondholders before dividends are paid to stockholders. 
C) ​Bondholders face no risk from changing market interest rates on bonds that have a fixed interest rate. 
D) ​The capital gains on bonds are generally more limited than the capital gains on stocks. 
A) ​Bonds can be purchased from corporations as well as governments. 
B) ​Interest must be paid to bondholders before dividends are paid to stockholders. 
C) ​Bondholders face no risk from changing market interest rates on bonds that have a fixed interest rate. 
D) ​The capital gains on bonds are generally more limited than the capital gains on stocks.

Question 3

In 2005 and 2006, because of fears of inflation, the Fed:

Accepted Answer

A) ​increased interest rates which lead to higher monthly payments on fixed rate mortgages. 
B) ​increased interest rates which lead to higher monthly payments on adjustable rate mortgages. 
C) ​decreased interest rates which lead to higher monthly payments on fixed rate mortgages. 
D) ​decreased interest rates which lead to higher monthly payments on adjustable rate mortgages. 
A) ​increased interest rates which lead to higher monthly payments on fixed rate mortgages. 
B) ​increased interest rates which lead to higher monthly payments on adjustable rate mortgages. 
C) ​decreased interest rates which lead to higher monthly payments on fixed rate mortgages. 
D) ​decreased interest rates which lead to higher monthly payments on adjustable rate mortgages.

Question 4

Rank bonds, common stock, and preferred stock with regard to two factors the possibility of a substantial increase in value. Rank these same securities with regard to investors' legal claims for repayment on their investments.

Accepted Answer

Possibility of increase in val

Question 5

Incentives for borrowers and savers in the loanable funds market are determined by the nominal interest rate as opposed to the real interest rate.

Accepted Answer

A) True 
 B)False

Question 6

What is the present value of $1,000 to be received in two years if the current market interest rate is 8.0%?

Accepted Answer

A) ​$481 
B) ​$556 
C) ​$857 
D) ​$926 
A) ​$481 
B) ​$556 
C) ​$857 
D) ​$926

Question 7

An increase in real interest rates will lead to an increase in the quantity of loanable funds supplied.

Accepted Answer

A) True 
 B)False

Question 8

The PE ratio is a measure of how highly a stock is valued relative to its current earnings.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a type of ownership that features a fixed payment?

Accepted Answer

A) ​common stock 
B) ​preferred stock 
C) ​retained earnings 
D) ​bonds 
A) ​common stock 
B) ​preferred stock 
C) ​retained earnings 
D) ​bonds

Question 10

Other things held constant, investment in physical capital will increase:

Accepted Answer

A) ​labor productivity. 
B) ​national income. 
C) ​wages. 
D) ​all of the above 
A) ​labor productivity. 
B) ​national income. 
C) ​wages. 
D) ​all of the above

Question 11

Housing prices peaked in:

Accepted Answer

A) ​1997. 
B) ​2000. 
C) ​2003. 
D) ​2006. 
A) ​1997. 
B) ​2000. 
C) ​2003. 
D) ​2006.

Question 12

A bank is an example of a financial intermediary.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a method by which a firm can obtain financial resources to invest in capital?

Accepted Answer

A) ​use of retained earnings 
B) ​borrowing from financial intermediaries 
C) ​selling stocks or bonds 
D) ​all of the above 
A) ​use of retained earnings 
B) ​borrowing from financial intermediaries 
C) ​selling stocks or bonds 
D) ​all of the above

Question 14

The substantial risks taken by financial intermediaries like Sallie Mae because they are effectively insured are examples of what economists refer to as:

Accepted Answer

A) ​sub-prime behavior. 
B) ​asymmetric information. 
C) ​moral hazard. 
D) ​countercyclical policy. 
A) ​sub-prime behavior. 
B) ​asymmetric information. 
C) ​moral hazard. 
D) ​countercyclical policy.

Question 15

"Saving" refers to ____ while "savings" refers to ____.

Accepted Answer

A) ​a stock concept; a flow concept 
B) ​how much is saved within a certain time period; accumulated assets 
C) ​a stock concept; accumulated assets 
D) ​how much is saved within a certain time period; a flow concept 
A) ​a stock concept; a flow concept 
B) ​how much is saved within a certain time period; accumulated assets 
C) ​a stock concept; accumulated assets 
D) ​how much is saved within a certain time period; a flow concept

Question 16

Crowding out will lead to a decrease in supply of loanable funds, a decrease in real interest rates, and subsequently a decrease in spending by households and firms.

Accepted Answer

A) True 
 B)False

Question 17

A decrease in real interest rates will lead to an increase in the demand for loanable funds.

Accepted Answer

A) True 
 B)False

Question 18

The use of financial leveraging on mortgage backed securities played a central role in the 2008 financial crisis.

Accepted Answer

A) True 
 B)False

Question 19

The actions of a miser benefit ____ and the actions of a philanthropist benefit ____.

Accepted Answer

A) ​a select few; a wide range of individuals 
B) ​a wide range of individuals; a select few 
C) ​a wide range of individuals; a wide range of individuals 
D) ​a select few; a select few 
A) ​a select few; a wide range of individuals 
B) ​a wide range of individuals; a select few 
C) ​a wide range of individuals; a wide range of individuals 
D) ​a select few; a select few

Question 20

Owners of preferred stock received fixed dividend payments while owners of common stock receive dividend payments that vary with the level of profits.

Accepted Answer

A) True 
 B)False

Exam 13: Monopoly and Antitrust

Other things equal, which of the following is the result of increased saving?

Which of the following is not true regarding bonds?

In 2005 and 2006, because of fears of inflation, the Fed:

Rank bonds, common stock, and preferred stock with regard to two factors the possibility of a substantial increase in value. Rank these same securities with regard to investors' legal claims for repayment on their investments.

Incentives for borrowers and savers in the loanable funds market are determined by the nominal interest rate as opposed to the real interest rate.

What is the present value of $1,000 to be received in two years if the current market interest rate is 8.0%?

An increase in real interest rates will lead to an increase in the quantity of loanable funds supplied.

The PE ratio is a measure of how highly a stock is valued relative to its current earnings.

Which of the following is a type of ownership that features a fixed payment?

Other things held constant, investment in physical capital will increase:

Housing prices peaked in:

A bank is an example of a financial intermediary.

Which of the following is a method by which a firm can obtain financial resources to invest in capital?

The substantial risks taken by financial intermediaries like Sallie Mae because they are effectively insured are examples of what economists refer to as:

"Saving" refers to ____ while "savings" refers to ____.

Crowding out will lead to a decrease in supply of loanable funds, a decrease in real interest rates, and subsequently a decrease in spending by households and firms.

A decrease in real interest rates will lead to an increase in the demand for loanable funds.

The use of financial leveraging on mortgage backed securities played a central role in the 2008 financial crisis.

The actions of a miser benefit ____ and the actions of a philanthropist benefit ____.

Owners of preferred stock received fixed dividend payments while owners of common stock receive dividend payments that vary with the level of profits.

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

"Saving" refers to while "savings" refers to .

The actions of a miser benefit and the actions of a philanthropist benefit .