Exam 13: Saving, Investment, and the Financial System

Figure 26-4. On the horizontal axis of the graph, L represents the quantity of loanable funds in billions of dollars. -Refer to Figure 26-4. Regard the position of the Supply curve as fixed, as on the graph. If the real interest rate is 8 percent, the inflation rate is 3 percent, and the market for loanable funds is in equilibrium, then the position of the demand-for-loanable-funds curve must be

When someone borrows to purchase capital goods, he is using someone else's to fund his .

Alberta buys a paint sprayer and a lift for her car customizing shop. A macroeconomist would refer to these purchases as investment.

In a closed economy, if Y and T remained the same, but G rose and C fell but by less than the rise in G, what would happen to public and national saving?

The country of Cedarland does not trade with any other country. Its GDP is $17 billion. Its government purchases $5 billion worth of goods and services each year and collects $6 billion in taxes. Private saving in Cedarland is $5 billion. For Cedarland,

The indirect provision of funds by savers to borrowers is accomplished by

When a large, well-known corporation wishes to borrow directly from the public, it can

If the supply of loanable funds shifts to the right, then the equilibrium interest rate

If Congress instituted an investment tax credit, the interest rate would

Most entrepreneurs do not have enough money of their own to start their businesses. When they acquire the necessary funds from someone else,

Which of the following statements is correct?

For an economy that engages in international trade, GDP is divided into four components. Which of the following items is not one of those components?

In a closed economy, if Y remained the same, but G rose, T rose by the same amount as G, and C fell but by less than the increase in T, what would happen to private and national saving?

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

Volume, as reported in stock tables, refers to the

After a corporation issues stock, the stock

Larry buys stock in A to Z Express Company. Curly Corporation builds a new factory. Whose transaction would be an act of investment in the language of macroeconomics?

The amount of revenue a firm receives for the sale of its products minus its costs of production as measured by its accountants is the firm's

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

Municipal bonds pay a relatively