Exam 13: Saving, Investment, and the Financial System

Table 13-1 Stack Sym Yld \% P/E Val 100s Hi Lo Clase Net Che. GenMills GIS 2.5 35 13758 44.3 43.5 43.97 -0.63 Gillette G 2.2 31 30428 31.1 29.7 30 0.17 Graca GGG 1.2 16 705 24.2 23.1 23.95 -0.53 Hershey HSY 2.1 38 5418 63.4 61.7 62.45 0.72 -Refer to Table 13-1. Which firm had the P/E ratio that was closest to the historically typical P/E ratio?

On which of these bonds is the prospect of default least likely?

If the nominal interest rate is 7 percent and the real interest rate is 2 percent, then what is the inflation rate?

Lenders buy bonds and borrowers sell them.

Which of the following involves financial intermediation?

Generally, if people begin to expect a company to have higher future profits, the price of the company's stock will begin to decrease.

Other things the same, as the maturity of a bond becomes longer, the bond will pay

Figure 13-1. The figure depicts a demand-for-loanable-funds curve and two supply-of-loanable-funds curves. -Refer to Figure 13-1. Which of the following events would shift the supply curve from S1 to S2?

Suppose a country repealed its investment tax credit. The effects of this are represented by shifting the

Which of the following is not correct?

If a firm's price-earnings ratio is relatively low, then it might be an indication that

Which of the following policy changes would lead to a decrease in the real interest rate and an increase in investment and saving?

Public saving is T - G, while private saving is Y - T - C.

Which of the following is a financial-market transaction?

Scenario 13-3. Assume the following information for an imaginary, open economy. Consumption = $1,000; investment = $300; net exports = $100; taxes = $230; private saving = $200; and national saving = $150. -Refer to Scenario 13-3. This economy's government is running a

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?

Other things the same, an increase in the budget deficit

If Huedepool Beer runs into financial difficulty, the stockholders as

If, for an imaginary closed economy, investment amounts to $10,000 and the government is running a $2,500 deficit, then private saving must amount to $12,500.

Midwestern corporation issues bonds. Southern corporation issues stock. Which corporation used equity financing?