Question 1

If the real interest rate rises, people

Accepted Answer

A)  earn a higher real wage rate. 
B)  save more. 
C)  decrease their expected future income. 
D)  save less. 
A)  earn a higher real wage rate. 
B)  save more. 
C)  decrease their expected future income. 
D)  save less.

Question 2

How does an increase in the expected profit affect investment demand and the demand for loanable funds curve?

Accepted Answer

An increase in the expected profit incre

Question 3

What are the factors that change the supply of saving and shift the supply of loanable funds curve?

Accepted Answer

There are three main factors that influe

Question 4

When the inflation rate is positive, the

Accepted Answer

A)  nominal interest rate is zero. 
B)  real interest rate is less than the nominal interest rate. 
C)  real interest rate is greater than the nominal interest rate. 
D)  real interest rate equals the nominal interest rate. 
A)  nominal interest rate is zero. 
B)  real interest rate is less than the nominal interest rate. 
C)  real interest rate is greater than the nominal interest rate. 
D)  real interest rate equals the nominal interest rate.

Question 5

Suppose that Country A (a small country) has exports of $40 million and imports of $50 million. As a result, Country A will funds from the rest of the world and engage in net foreign
)

Accepted Answer

A)  send; lending 
B)  receive; lending 
C)  send; borrowing 
D)  receive; borrowing 
A)  send; lending 
B)  receive; lending 
C)  send; borrowing 
D)  receive; borrowing

Question 6

As the purchasing power of wealth increases, saving decreases.

Accepted Answer

A) True 
 B)False

Question 7

In 2007, France's exports totalled $490 billion and its imports totalled $529 billion. As a result, France is an international and financial funds from around the world France's market for loanable funds.

Accepted Answer

A)  borrower; enters 
B)  lender; leaves 
C)  borrower; leaves 
D)  lender; enters 
A)  borrower; enters 
B)  lender; leaves 
C)  borrower; leaves 
D)  lender; enters

Question 8

In 2009, the United States and foreign economies start to recover from the recession. U.S. firms increase their profit expectations. As a result, the demand for loanable funds curve shifts and the real interest rate .

Accepted Answer

A)  rightward; increases. 
B)  leftward; decreases. 
C)  leftward; increases. 
D)  rightward; decreases. 
A)  rightward; increases. 
B)  leftward; decreases. 
C)  leftward; increases. 
D)  rightward; decreases.

Question 9

Due to the recession in 2008, firms decreased their profit expectations. As a result, there was a
Shift in the loanable funds curve.

Accepted Answer

A)  leftward; demand for 
B)  rightward, supply of 
C)  rightward; supply of 
D)  rightward; demand for 
A)  leftward; demand for 
B)  rightward, supply of 
C)  rightward; supply of 
D)  rightward; demand for

Question 10

Net investment equals

Accepted Answer

A)  gross investment/depreciation. 
B)  gross investment minus depreciation. 
C)  the total quantity of plant, equipment and buildings. 
D)  capital stock minus depreciation. 
A)  gross investment/depreciation. 
B)  gross investment minus depreciation. 
C)  the total quantity of plant, equipment and buildings. 
D)  capital stock minus depreciation.

Question 11

National saving is defined as the amount of saving by

Accepted Answer

A)  households. 
B)  businesses. 
C)  businesses and households and the government. 
D)  businesses and households. 
A)  households. 
B)  businesses. 
C)  businesses and households and the government. 
D)  businesses and households.

Question 12

When the real interest rate increases,

Accepted Answer

A)  the supply of loanable funds curve shifts rightward. 
B)  the supply of loanable funds curve shifts leftward. 
C)  there is a movement downward along the supply of loanable funds curve. 
D)  there is a movement upward along the supply of loanable funds curve. 
A)  the supply of loanable funds curve shifts rightward. 
B)  the supply of loanable funds curve shifts leftward. 
C)  there is a movement downward along the supply of loanable funds curve. 
D)  there is a movement upward along the supply of loanable funds curve.

Question 13

The total amount of plants, inventories, equipment and buildings is called

Accepted Answer

A)  depreciation. 
B)  gross investment. 
C)  net investment. 
D)  capital stock. 
A)  depreciation. 
B)  gross investment. 
C)  net investment. 
D)  capital stock.

Question 14

The nominal interest rate minus the real interest rate approximately equals the

Accepted Answer

A)  rate of increase in the amount of investment. 
B)  inflation rate. 
C)  the rate the bank receives to cover lending costs. 
D)  the rate of increase in the income. 
A)  rate of increase in the amount of investment. 
B)  inflation rate. 
C)  the rate the bank receives to cover lending costs. 
D)  the rate of increase in the income.

Question 15

In 2007, the Euribor rate (the interest rate banks in Europe charge each other) was 4.86 percent. The inflation rate in France in 2007 was 2.8 percent. The real interest rate in France is

Accepted Answer

A)  0.58 percent. 
B)  13.6 percent. 
C)  2.06 percent. 
D)  7.62 percent 
A)  0.58 percent. 
B)  13.6 percent. 
C)  2.06 percent. 
D)  7.62 percent

Question 16

Suppose Molly has an income of $35,000 annually and has inherited a savings account of $20,000. Wyatt has a job that pays $35,000 annually, but has debts totaling $6,000. Which of the following is true?

Accepted Answer

A)  We can expect Wyatt to save more than Molly this year. 
B)  We can expect Wyatt and Molly to have equal amounts of consumption this year. 
C)  We can expect Molly to save more than Wyatt this year. 
D)  We can expect Wyatt and Molly to save the same proportion of their incomes this year. 
A)  We can expect Wyatt to save more than Molly this year. 
B)  We can expect Wyatt and Molly to have equal amounts of consumption this year. 
C)  We can expect Molly to save more than Wyatt this year. 
D)  We can expect Wyatt and Molly to save the same proportion of their incomes this year.

Question 17

A share of Apple stock costs $82.58 and gives $5.36 of Apple profit to its owner. The interest rate on this share

Accepted Answer

A)  15.4 percent 
B)  $15.41. 
C)  6.4 percent. 
D)  $6.41. 
A)  15.4 percent 
B)  $15.41. 
C)  6.4 percent. 
D)  $6.41.

Question 18

-Use the information in the table above to calculate the value of government saving.

Accepted Answer

A)  - $5 million 
B)  $15 million 
C)  $45 million 
D)  $5 million 
A)  - $5 million 
B)  $15 million 
C)  $45 million 
D)  $5 million

Question 19

The real interest rate is in the United States compared to Zimbabwe because .

Accepted Answer

A)  higher; more firms want to borrow financial capital in the United States. 
B)  lower; the United States is a net borrower. 
C)  lower; there is a lower risk premium in the United States. 
D)  higher; Zimbabwe is a net borrower. 
A)  higher; more firms want to borrow financial capital in the United States. 
B)  lower; the United States is a net borrower. 
C)  lower; there is a lower risk premium in the United States. 
D)  higher; Zimbabwe is a net borrower.

Question 20

-In the above figure, a decrease in the real interest rate will result in a movement from point E to

Accepted Answer

A)  point G. 
B)  point F. 
C)  point H. 
D)  point I. 
A)  point G. 
B)  point F. 
C)  point H. 
D)  point I.

If the real interest rate rises, people

How does an increase in the expected profit affect investment demand and the demand for loanable funds curve?

What are the factors that change the supply of saving and shift the supply of loanable funds curve?

When the inflation rate is positive, the

Suppose that Country A (a small country) has exports of $40 million and imports of $50 million. As a result, Country A will funds from the rest of the world and engage in net foreign )

As the purchasing power of wealth increases, saving decreases.

In 2007, France's exports totalled $490 billion and its imports totalled $529 billion. As a result, France is an international and financial funds from around the world France's market for loanable funds.

In 2009, the United States and foreign economies start to recover from the recession. U.S. firms increase their profit expectations. As a result, the demand for loanable funds curve shifts and the real interest rate .

Due to the recession in 2008, firms decreased their profit expectations. As a result, there was a Shift in the loanable funds curve.

Net investment equals

National saving is defined as the amount of saving by

When the real interest rate increases,

The total amount of plants, inventories, equipment and buildings is called

The nominal interest rate minus the real interest rate approximately equals the

In 2007, the Euribor rate (the interest rate banks in Europe charge each other) was 4.86 percent. The inflation rate in France in 2007 was 2.8 percent. The real interest rate in France is

Suppose Molly has an income of $35,000 annually and has inherited a savings account of $20,000. Wyatt has a job that pays $35,000 annually, but has debts totaling $6,000. Which of the following is true?

A share of Apple stock costs $82.58 and gives $5.36 of Apple profit to its owner. The interest rate on this share

-Use the information in the table above to calculate the value of government saving.

The real interest rate is in the United States compared to Zimbabwe because .

-In the above figure, a decrease in the real interest rate will result in a movement from point E to

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 7: Finance, Saving, and Investment

If the real interest rate rises, people

How does an increase in the expected profit affect investment demand and the demand for loanable funds curve?

What are the factors that change the supply of saving and shift the supply of loanable funds curve?

When the inflation rate is positive, the

Suppose that Country A (a small country) has exports of $40 million and imports of $50 million. As a result, Country A will funds from the rest of the world and engage in net foreign )

As the purchasing power of wealth increases, saving decreases.

In 2007, France's exports totalled $490 billion and its imports totalled $529 billion. As a result, France is an international and financial funds from around the world France's market for loanable funds.

In 2009, the United States and foreign economies start to recover from the recession. U.S. firms increase their profit expectations. As a result, the demand for loanable funds curve shifts and the real interest rate .

Due to the recession in 2008, firms decreased their profit expectations. As a result, there was a Shift in the loanable funds curve.

Net investment equals

National saving is defined as the amount of saving by

When the real interest rate increases,

The total amount of plants, inventories, equipment and buildings is called

The nominal interest rate minus the real interest rate approximately equals the

In 2007, the Euribor rate (the interest rate banks in Europe charge each other) was 4.86 percent. The inflation rate in France in 2007 was 2.8 percent. The real interest rate in France is

Suppose Molly has an income of $35,000 annually and has inherited a savings account of $20,000. Wyatt has a job that pays $35,000 annually, but has debts totaling $6,000. Which of the following is true?

A share of Apple stock costs $82.58 and gives $5.36 of Apple profit to its owner. The interest rate on this share

-Use the information in the table above to calculate the value of government saving.

The real interest rate is in the United States compared to Zimbabwe because .

-In the above figure, a decrease in the real interest rate will result in a movement from point E to

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters