Exam 7: Finance, Saving, and Investment

Which of the following are major influences on the expected profit from an investment? I. technology advances II. stock market behavior III. accounting practices

If the economyʹs capital stock decreases over time,

The demand for loanable funds is the relationship between loanable funds and the other things remaining the same.

If the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, then

What is the approximate relationship among the real interest rate, the inflation rate, and the nominal interest rate?

In November 2008, Grand Canyon Education chose to finance expansion by offering ownership in its firm. These owners of Grand Canyon Education the are entitled to a share of the firmʹs profits. This financing is an example of .

What are the factors that change investment demand and shift the demand for loanable funds curve?

If net taxes exceed government expenditures, the government sector has a budget and government saving is .

The funds used to buy and operate physical capital are

During the financial crisis in 2007 and 2008, financial institutions believed that default risks were higher. As a result, there was in the supply of loanable funds and a in the real interest rate.

The real interest rate has a positive relationship with the supply of loanable funds.)

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

An increase in the real interest rate the quantity of loanable funds supplied and The quantity of loanable funds demanded.

In the loanable funds market, an increase in wealth shifts the loanable funds curve )

Suppose a firm has an investment project which will cost $200,000 and result in $30,000 profit. The firm will not undertake the project if the interest rate is .

The demand for loanable funds curve is

The Ricardo-Barro effect of a government budget deficit refers to

People expect an inflation rate of 5 percent and the real interest rate is positive. Then the nominal interest rate will be

When the inflation rate is negative, the

In January 2010, Timʹs Gyms, Inc. owned machines valued at $1 million. During the year, the market value of the equipment fell by 30 percent. During 2010, Tim spent $200,000 on new machines. During 2010, Timʹs gross investment totalled