Exam 8: Saving, Investment, and the Financial System

Suppose that you are a broker and people tell you the following about themselves. What sort of bond would you recommend to each? Defend your choices. a. "I am in a high federal income tax bracket and I don't want to take very much risk." b. "I want a high return and I am willing to take a lot of risk to get it." c. "I want a decent return and I have enough deductions that I don't value tax breaks highly."

A closed economy

If, for an imaginary closed economy, investment amounts to $10,000 and the government is running a $2,500 deficit, then private saving must amount to $12,500.

Which of the following statements about mutual funds is correct?

When public saving falls by $2b and private saving falls by $1b in a closed economy,

If the government currently has a budget deficit, then

If you were to start a business delivering documents, you might need to purchase cell phones, bicycles, desks, and chairs.

In the language of macroeconomics, investment refers to

Suppose a country has a larger increase in debt in 2014 than it had in 2013. Then other things the same,

If a firm's price­earnings ratio is relatively low, then it might be an indication that

A bond buyer is a

The source of the supply of loanable funds is

The identity that shows that total income and total expenditure are equal is

Which of the following would likely make the interest rate on a bond higher than otherwise?

After a corporation issues stock, the stock

Which of the following is correct?

Stock represents

In a closed economy, each unit of output is either consumed by households or invested.

Suppose private saving in a closed economy is $12b and investment is $10b.

Which of the following bond buyers did not buy the bond that best met his or her objective?