Exam 8: Saving, Investment, and the Financial System

If you know that Alberta Dreams Corporation, a travel equipment and clothing company, has revenues of $30 million and accounting costs of $10 million, you also know that its earnings are $20 million.

What would NOT result from replacing the income tax with a consumption tax?

How does the supply of loanable funds curve slope?

Approximately how many firms are included in the S&P/TSX stock index?

Which of the following is a financial intermediary?

Which of the following terms refers to the profits NOT paid out to shareholders?

Suppose the Steamhot yoga chain has revenues of $55 million, costs of $105 million, and currently has issued 20 million shares selling at $30 each. Compute the price/earnings ratio. Show your work. Is this ratio relatively high or low What might an increase in the price/earnings ratio indicate

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

Suppose a small closed economy has GDP of $5 billion, consumption of $3 billion, and government expenditures of $1 billion. Then domestic investment and national saving are both $1 billion.

-Refer to the Table 8-4. Supposing the market for loanable funds is in equilibrium, what is the quantity of funds demanded?

If people become less optimistic about the future earnings of Hyde Park Records Corporation, the price of stock in the company will fall.

Which statement best defines retained earnings?

Which statement best describes the pattern in the returns of index funds?

You are required to testify before Parliament concerning the effects of an increase in the government surplus. What is the best thing for you to say?

What does the slope of the demand for loanable funds curve represent?

Table 8-1 The following table shows stock prices and volumes for a few hypothetical companies. -Refer to Table 8-1. Assume that the closing price was also the average price at which each stock transaction took place. What was the total dollar volume of company B's stock traded that day?

Suppose that the government finds a major defect in one of a company's products and demands that it be taken off the market. What would we expect?

Generally, when economists talk of the "interest rate," what are they talking about?

-Refer to the Table 8-3. Supposing equilibrium exists in the market for loanable funds, what is the quantity of funds supplied in this market?

What would an increase in the budget deficit most likely do to investment spending?