Question 1

Who would a macroeconomist consider as investment?

Accepted Answer

A)  Brianna purchases a bond issued by CP Rail 
B)  Jerry purchases stock issued by BCE. 
C)  Anita builds a new house 
D)  Brenda buys an amount of gold. 
A)  Brianna purchases a bond issued by CP Rail 
B)  Jerry purchases stock issued by BCE. 
C)  Anita builds a new house 
D)  Brenda buys an amount of gold.

Question 2

What makes Y = C + I + G + NX an identity?

Accepted Answer

A)  Each symbol identifies a variable. 
B)  The right-hand and left-hand sides are equal. 
C)  The equality holds due to the way the variables are defined. 
D)  This relationship is identical for all economies. 
A)  Each symbol identifies a variable. 
B)  The right-hand and left-hand sides are equal. 
C)  The equality holds due to the way the variables are defined. 
D)  This relationship is identical for all economies.

Question 3

Which term refers to the length of time until a bond matures?

Accepted Answer

A)  duration 
B)  term 
C)  maturity 
D)  expiration period 
A)  duration 
B)  term 
C)  maturity 
D)  expiration period

Question 4

In a closed economy, what does national saving equal?

Accepted Answer

A)  income minus consumption 
B)  income minus the sum of consumption and government expenditures 
C)  income minus consumption minus taxes 
D)  income minus government expenditures 
A)  income minus consumption 
B)  income minus the sum of consumption and government expenditures 
C)  income minus consumption minus taxes 
D)  income minus government expenditures

Question 5

Which of the following most likely determines the price of stocks traded on exchanges?

Accepted Answer

A)  the Corporate Securities Commission 
B)  the supply and demand for goods and services 
C)  the supply and demand for the stock 
D)  the Toronto Stock Exchange 
A)  the Corporate Securities Commission 
B)  the supply and demand for goods and services 
C)  the supply and demand for the stock 
D)  the Toronto Stock Exchange

Question 6

What does a higher interest rate induce people to do?

Accepted Answer

A)  save more, so the supply of loanable funds slopes upward 
B)  save less, so the supply of loanable funds slopes downward 
C)  invest more, so the supply of loanable funds slopes upward 
D)  invest less, so the supply of loanable funds slopes downward 
A)  save more, so the supply of loanable funds slopes upward 
B)  save less, so the supply of loanable funds slopes downward 
C)  invest more, so the supply of loanable funds slopes upward 
D)  invest less, so the supply of loanable funds slopes downward

Question 7

The country of Meritor uses the merit as its currency. Recent national income statistics shows that it has GDP of 700 million merits, no government transfer payments, taxes of 210 million merits, a budget surplus of 60 million merits, and investment of 200 million merits. What is the sum of its consumption and government expenditures?

Accepted Answer

A)  470 million merits 
B)  490 million merits 
C)  500 million merits 
D)  560 million merits 
A)  470 million merits 
B)  490 million merits 
C)  500 million merits 
D)  560 million merits

Question 8

What happens when a person buys shares in a mutual fund?

Accepted Answer

A)  The person indirectly becomes owner or creditor to many companies. 
B)  The person lends to and borrows from the other shareholders in the mutual fund. 
C)  The person receives a fixed interest as long as he or she does not sell the shares. 
D)  The person lends money to the federal government. 
A)  The person indirectly becomes owner or creditor to many companies. 
B)  The person lends to and borrows from the other shareholders in the mutual fund. 
C)  The person receives a fixed interest as long as he or she does not sell the shares. 
D)  The person lends money to the federal government.

Question 9

If the current market interest rate for loanable funds is below the equilibrium level, what is most likely to happen?

Accepted Answer

A)  The quantity of loanable funds demanded will exceed the quantity of loanable funds supplied and the interest rate will rise. 
B)  The quantity of loanable funds supplied will exceed the quantity of loanable funds demanded and the interest rate will rise. 
C)  The quantity of loanable funds demanded will exceed the quantity of loanable funds supplied and the interest rate will fall. 
D)  The quantity of loanable funds supplied will exceed the quantity of loanable funds demanded and the interest rate will fall. 
A)  The quantity of loanable funds demanded will exceed the quantity of loanable funds supplied and the interest rate will rise. 
B)  The quantity of loanable funds supplied will exceed the quantity of loanable funds demanded and the interest rate will rise. 
C)  The quantity of loanable funds demanded will exceed the quantity of loanable funds supplied and the interest rate will fall. 
D)  The quantity of loanable funds supplied will exceed the quantity of loanable funds demanded and the interest rate will fall.

Question 10

What is a bond?

Accepted Answer

A)  a financial intermediary 
B)  a certificate of indebtedness 
C)  a certificate of partial ownership in an enterprise 
D)  a mortgage 
A)  a financial intermediary 
B)  a certificate of indebtedness 
C)  a certificate of partial ownership in an enterprise 
D)  a mortgage

Question 11

If other things are the same, will countries that tax less on saving have lower or higher interest rates and investment than other countries?

Accepted Answer

A)  lower interest rates and higher investment 
B)  lower interest rates and lower investment 
C)  higher interest rates and higher investment 
D)  higher interest rates and lower investment 
A)  lower interest rates and higher investment 
B)  lower interest rates and lower investment 
C)  higher interest rates and higher investment 
D)  higher interest rates and lower investment

Question 12

Which statement best defines stock indexes?

Accepted Answer

A)  They are the average of a group of stock prices. 
B)  They are the average of a group of stock yields. 
C)  They are reports in the newspaper that report on the price of the stock and earnings of the corporation. 
D)  They are measures of the risk relative to the profitability of corporations. 
A)  They are the average of a group of stock prices. 
B)  They are the average of a group of stock yields. 
C)  They are reports in the newspaper that report on the price of the stock and earnings of the corporation. 
D)  They are measures of the risk relative to the profitability of corporations.

Question 13

Which statement best defines a corporation's earnings?

Accepted Answer

A)  They are the amount of revenue the corporation receives for the sale of its products, minus its costs of production, as measured by its accountants, minus the dividends paid out. 
B)  They are the amount of revenue the corporation receives for the sale of its products, minus its direct and indirect costs of production, as measured by its economists, minus the dividends paid out. 
C)  They are the amount of revenue the corporation receives for the sale of its products, minus its costs of production, as measured by its accountants. 
D)  They are the amount of revenue the corporation receives for the sale of its products, minus its direct and indirect costs of production, as measured by its economists. 
A)  They are the amount of revenue the corporation receives for the sale of its products, minus its costs of production, as measured by its accountants, minus the dividends paid out. 
B)  They are the amount of revenue the corporation receives for the sale of its products, minus its direct and indirect costs of production, as measured by its economists, minus the dividends paid out. 
C)  They are the amount of revenue the corporation receives for the sale of its products, minus its costs of production, as measured by its accountants. 
D)  They are the amount of revenue the corporation receives for the sale of its products, minus its direct and indirect costs of production, as measured by its economists.

Question 14

Table 8-1
The following table shows stock prices and volumes for a few hypothetical companies.
 
-Refer to Table 8-1. In dollar terms, which company paid the highest dividend per share?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Which term refers to the amount of revenue a firm receives for the sale of its products, minus its costs of production, as measured by its accountants?

Accepted Answer

A)  earnings 
B)  retained earnings 
C)  economic, or real, profit 
D)  dividends 
A)  earnings 
B)  retained earnings 
C)  economic, or real, profit 
D)  dividends

Question 17

Assuming that all else remains equal, when people become more optimistic about a company's future, what is most likely to happen to the company's stock?

Accepted Answer

A)  The supply of the stock and the price will both rise. 
B)  The supply of the stock and the price will both fall. 
C)  The demand for the stock and the price will both rise. 
D)  The demand for the stock and the price will both fall. 
A)  The supply of the stock and the price will both rise. 
B)  The supply of the stock and the price will both fall. 
C)  The demand for the stock and the price will both rise. 
D)  The demand for the stock and the price will both fall.

Question 18

Suppose a developing country decides to institute an investment tax credit. As a result, what is most likely to happen?

Accepted Answer

A)  Interest rates would rise, and investment would fall. 
B)  Interest rates would fall, and investment would rise. 
C)  Both interest rates and investment would fall. 
D)  Both interest rates and investment would rise. 
A)  Interest rates would rise, and investment would fall. 
B)  Interest rates would fall, and investment would rise. 
C)  Both interest rates and investment would fall. 
D)  Both interest rates and investment would rise.

Question 19

Which term refers to the situation when the tax revenue of the federal government exceeds government spending?

Accepted Answer

A)  budget deficit 
B)  budget surplus 
C)  national debt 
D)  trade deficit 
A)  budget deficit 
B)  budget surplus 
C)  national debt 
D)  trade deficit

Question 20

In a closed economy, investment must be equal to private saving.

Accepted Answer

A) True 
 B)False

Who would a macroeconomist consider as investment?

What makes Y = C + I + G + NX an identity?

Which term refers to the length of time until a bond matures?

In a closed economy, what does national saving equal?

Which of the following most likely determines the price of stocks traded on exchanges?

What does a higher interest rate induce people to do?

What happens when a person buys shares in a mutual fund?

If the current market interest rate for loanable funds is below the equilibrium level, what is most likely to happen?

What is a bond?

If other things are the same, will countries that tax less on saving have lower or higher interest rates and investment than other countries?

Which statement best defines stock indexes?

Which statement best defines a corporation's earnings?

Table 8-1 The following table shows stock prices and volumes for a few hypothetical companies. -Refer to Table 8-1. In dollar terms, which company paid the highest dividend per share?

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

Which term refers to the amount of revenue a firm receives for the sale of its products, minus its costs of production, as measured by its accountants?

Assuming that all else remains equal, when people become more optimistic about a company's future, what is most likely to happen to the company's stock?

Suppose a developing country decides to institute an investment tax credit. As a result, what is most likely to happen?

Which term refers to the situation when the tax revenue of the federal government exceeds government spending?

In a closed economy, investment must be equal to private saving.

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

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small 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

Five Debates Over Macroeconomic Policy

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Exam 8: Saving, Investment, and the Financial System

Who would a macroeconomist consider as investment?

What makes Y = C + I + G + NX an identity?

Which term refers to the length of time until a bond matures?

In a closed economy, what does national saving equal?

Which of the following most likely determines the price of stocks traded on exchanges?

What does a higher interest rate induce people to do?

What happens when a person buys shares in a mutual fund?

If the current market interest rate for loanable funds is below the equilibrium level, what is most likely to happen?

What is a bond?

If other things are the same, will countries that tax less on saving have lower or higher interest rates and investment than other countries?

Which statement best defines stock indexes?

Which statement best defines a corporation's earnings?

Table 8-1 The following table shows stock prices and volumes for a few hypothetical companies. -Refer to Table 8-1. In dollar terms, which company paid the highest dividend per share?

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

Which term refers to the amount of revenue a firm receives for the sale of its products, minus its costs of production, as measured by its accountants?

Assuming that all else remains equal, when people become more optimistic about a company's future, what is most likely to happen to the company's stock?

Suppose a developing country decides to institute an investment tax credit. As a result, what is most likely to happen?

Which term refers to the situation when the tax revenue of the federal government exceeds government spending?

In a closed economy, investment must be equal to private saving.

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

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small 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

Five Debates Over Macroeconomic Policy

Filters