Question 1

In a small closed economy investment is $50 billion and private saving is $45 billion. What are public saving and national saving?

Accepted Answer

A)  $5 billion and $45 billion 
B)  -$5 billion and $45 billion 
C)  $5 billion and $50 billion 
D)  -$5 billion and $50 billion 
A)  $5 billion and $45 billion 
B)  -$5 billion and $45 billion 
C)  $5 billion and $50 billion 
D)  -$5 billion and $50 billion

Question 2

The price of a stock will rise if

Accepted Answer

A)  the managers of a stock exchange decide the price should be higher. 
B)  the demand for the stock rises. 
C)  the supply of the stock rises. 
D)  None of the above are correct. 
A)  the managers of a stock exchange decide the price should be higher. 
B)  the demand for the stock rises. 
C)  the supply of the stock rises. 
D)  None of the above are correct.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

You have some estimates of national accounts numbers for a closed economy for the coming year. Under one set of expectations, government purchases will be $30 billion, transfer payments will be $10 billion, and taxes will be $45 billion. Under another set of expectations, GDP will be $200 billion, taxes will be $50 billion, transfer payments will be $20 billion, consumption will be $120 million, and investment will be $40 billion. Based on these numbers in the first case there should be a

Accepted Answer

A)  $15 billion surplus, and in the second case a $10 billion surplus. 
B)  $15 billion surplus, and in the second case a $30 billion deficit. 
C)  $5 billion surplus, and in the second case a $10 billion deficit. 
D)  $5 billion surplus, and in the second case a $30 billion deficit. 
A)  $15 billion surplus, and in the second case a $10 billion surplus. 
B)  $15 billion surplus, and in the second case a $30 billion deficit. 
C)  $5 billion surplus, and in the second case a $10 billion deficit. 
D)  $5 billion surplus, and in the second case a $30 billion deficit.

Question 5

The ratio of debt to GDP in the United States

Accepted Answer

A)  tends to rise during wars. 
B)  rose during the decade that began in 2001. 
C)  fell during the late 1990s. 
D)  All of the above are correct. 
A)  tends to rise during wars. 
B)  rose during the decade that began in 2001. 
C)  fell during the late 1990s. 
D)  All of the above are correct.

Question 6

Index funds

Accepted Answer

A)  typically have a higher rate of return and higher costs than managed mutual funds. 
B)  typically have a higher rate of return and lower costs than managed mutual funds. 
C)  typically have a lower rate of return and higher costs than managed mutual funds. 
D)  typically have a lower rate of return and lower costs than managed mutual funds. 
A)  typically have a higher rate of return and higher costs than managed mutual funds. 
B)  typically have a higher rate of return and lower costs than managed mutual funds. 
C)  typically have a lower rate of return and higher costs than managed mutual funds. 
D)  typically have a lower rate of return and lower costs than managed mutual funds.

Question 7

Public saving is the difference between and .

Accepted Answer

tax revenue, governm

Question 8

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.

Accepted Answer

A) True 
 B)False

Question 9

Queen City Sausage stock is selling at $40 per share, it has retained earnings of $1.00 per share, and dividends of $1.00 per share. What is the price-earnings ratio and what is the dividend yield?

Accepted Answer

A)  20, 2.5 percent. 
B)  20, 5 percent. 
C)  40, 2.5 percent. 
D)  40, 5 percent. 
A)  20, 2.5 percent. 
B)  20, 5 percent. 
C)  40, 2.5 percent. 
D)  40, 5 percent.

Question 10

An increase in the government's budget surplus means

Accepted Answer

A)  public saving is greater than $0 and increasing. 
B)  public saving is greater than $0 and decreasing. 
C)  public saving is less than $0 and increasing. 
D)  public saving is less than $0 and decreasing. 
A)  public saving is greater than $0 and increasing. 
B)  public saving is greater than $0 and decreasing. 
C)  public saving is less than $0 and increasing. 
D)  public saving is less than $0 and decreasing.

Question 11

A bond that never matures is known as a

Accepted Answer

A)  perpetuity. 
B)  an intermediary bond. 
C)  an indexed bond. 
D)  a junk bond. 
A)  perpetuity. 
B)  an intermediary bond. 
C)  an indexed bond. 
D)  a junk bond.

Question 12

A closed economy

Accepted Answer

A)  does not engage in international trade of goods and services. 
B)  does not engage in international borrowing or lending. 
C)  both A and B 
D)  engages in international borrowing and lending. 
A)  does not engage in international trade of goods and services. 
B)  does not engage in international borrowing or lending. 
C)  both A and B 
D)  engages in international borrowing and lending.

Question 13

National saving is equal to Y - T - C.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a certificate of indebtedness?

Accepted Answer

A)  both stocks and bonds 
B)  stocks but not bonds 
C)  bonds but not stocks 
D)  neither stocks nor bonds 
A)  both stocks and bonds 
B)  stocks but not bonds 
C)  bonds but not stocks 
D)  neither stocks nor bonds

Question 15

Which of the following is both a financial institution and a financial intermediary?

Accepted Answer

A)  banks 
B)  stock exchanges 
C)  the bond market 
D)  All of the above are correct. 
A)  banks 
B)  stock exchanges 
C)  the bond market 
D)  All of the above are correct.

Question 16

The country of Meditor, a small country with a closed economy, uses the merit as its currency. Recent national income statistics showed that it had GDP of $600 million merits, no government transfer payments, taxes of $150 million merits, a budget surplus of $40 billion merits, and investment of $100 billion merits. What were its consumption and government expenditures on goods and services?

Accepted Answer

A)  $460 million merits and $150 million merits 
B)  $310 million merits and $190 million merits 
C)  $350 million merits and $190 million merits 
D)  $390 million merits and $110 million merits 
A)  $460 million merits and $150 million merits 
B)  $310 million merits and $190 million merits 
C)  $350 million merits and $190 million merits 
D)  $390 million merits and $110 million merits

Question 17

Other things the same, the higher the rate of saving and investment in a country, the higher will be the standard of living in the future.

Accepted Answer

A) True 
 B)False

Question 18

Late in the 2000-2009 decade, real estate prices in the U.S. fell by a greater percentage than they had fallen since the

Accepted Answer

A)  1890s. 
B)  1930s. 
C)  1950s. 
D)  1970s. 
A)  1890s. 
B)  1930s. 
C)  1950s. 
D)  1970s.

Question 19

Morgan, a financial advisor, has told her clients the following things. Which of her statements is not correct?

Accepted Answer

A)  "U.S. government bonds generally pay a higher rate of interest than corporate bonds." 
B)  "The interest received on corporate bonds is taxable." 
C)  "U.S. government bonds have the lowest default risk." 
D)  "If you purchase a municipal bond, you can sell it before it matures." 
A)  "U.S. government bonds generally pay a higher rate of interest than corporate bonds." 
B)  "The interest received on corporate bonds is taxable." 
C)  "U.S. government bonds have the lowest default risk." 
D)  "If you purchase a municipal bond, you can sell it before it matures."

Question 20

If Huedepool Beer runs into financial difficulty, the stockholders as

Accepted Answer

A)  part owners of Huedepool are paid before bondholders get paid anything at all. 
B)  part owners of Huedepool are paid after bondholders get paid. 
C)  creditors of Huedepool are paid before bondholders get paid anything at all. 
D)  creditors of Huedepool are paid after bondholders get paid. 
A)  part owners of Huedepool are paid before bondholders get paid anything at all. 
B)  part owners of Huedepool are paid after bondholders get paid. 
C)  creditors of Huedepool are paid before bondholders get paid anything at all. 
D)  creditors of Huedepool are paid after bondholders get paid.

In a small closed economy investment is $50 billion and private saving is $45 billion. What are public saving and national saving?

The price of a stock will rise if

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

The ratio of debt to GDP in the United States

Index funds

Public saving is the difference between and .

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.

Queen City Sausage stock is selling at $40 per share, it has retained earnings of $1.00 per share, and dividends of $1.00 per share. What is the price-earnings ratio and what is the dividend yield?

An increase in the government's budget surplus means

A bond that never matures is known as a

A closed economy

National saving is equal to Y - T - C.

Which of the following is a certificate of indebtedness?

Which of the following is both a financial institution and a financial intermediary?

Other things the same, the higher the rate of saving and investment in a country, the higher will be the standard of living in the future.

Late in the 2000-2009 decade, real estate prices in the U.S. fell by a greater percentage than they had fallen since the

Morgan, a financial advisor, has told her clients the following things. Which of her statements is not correct?

If Huedepool Beer runs into financial difficulty, the stockholders as

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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Exam 8: Saving, Investment, and the Financial System

In a small closed economy investment is $50 billion and private saving is $45 billion. What are public saving and national saving?

The price of a stock will rise if

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

The ratio of debt to GDP in the United States

Index funds

Public saving is the difference between and .

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.

Queen City Sausage stock is selling at $40 per share, it has retained earnings of $1.00 per share, and dividends of $1.00 per share. What is the price-earnings ratio and what is the dividend yield?

An increase in the government's budget surplus means

A bond that never matures is known as a

A closed economy

National saving is equal to Y - T - C.

Which of the following is a certificate of indebtedness?

Which of the following is both a financial institution and a financial intermediary?

Other things the same, the higher the rate of saving and investment in a country, the higher will be the standard of living in the future.

Late in the 2000-2009 decade, real estate prices in the U.S. fell by a greater percentage than they had fallen since the

Morgan, a financial advisor, has told her clients the following things. Which of her statements is not correct?

If Huedepool Beer runs into financial difficulty, the stockholders as

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters