Exam 13: Saving, Investment, and the Financial System

Table 13-2 Stack Sym Yld \% P/E Val 100s Hi Lo Clase Nat Che. Baeing Ca. BA 1.55 30.48 4,531,600 64.78 63.70 64.62 +.93 Eli Lily and Cu. LLY 2.60 29.71 3,765,700 58.98 58.21 58.52 +.16 H. J. Heinz and Ca. HNZ 3.30 15.33 1,350,200 36.55 36.26 36.33 +.21 Kellog Cu. K 2.22 20.50 1,990,600 45.72 45.20 45.50 +.24 -Refer to Table 13-2. Which company had the highest earnings per share?

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

Volume, as reported in stock tables, refers to the

In a closed economy, if taxes fall and consumption rises, then private saving must fall.

Which of the two bonds in each example would you expect to generally pay the higher interest rate? Explain why. a.a U.S. government bond or a Venezuelan government bond b.a U.S. government bond or a municipal bond with the same term and issued by a creditworthy municipality. c.a 6-month Treasury bill or a 20-year Treasury bond d.a Microsoft bond or a bond issued by a new recording company

Figure 13-4. On the horizontal axis of the graph, L represents the quantity of loanable funds in billions of dollars. -Refer to Figure 13-4. Regard the position of the Supply curve as fixed, as on the graph. If the real interest rate is 4 percent, the inflation rate is 2 percent, and the market for loanable funds is in equilibrium, then the position of the demand-for-loanable-funds curve must be

If a firm wants to borrow it can

Given that Monika's income exceeds her expenditures, Monika is best described as a

In examining the national income accounts of the closed economy of Nepotocracy you see that this year it had taxes of $100 billion, transfers of $40 billion, and government purchases of goods and services of $80 billion. You also notice that last year it had private saving of $50 billion and investment of $70 billion. In which year did Nepotocracy have a budget deficit of $20 billion?

Figure 13-4. On the horizontal axis of the graph, L represents the quantity of loanable funds in billions of dollars. -Refer to Figure 13-4. If the equilibrium quantity of loanable funds is $50 billion and if the equilibrium nominal interest rate is 8 percent, then

Table 13-2 Stack Sym Yld \% P/E Val 100s Hi Lo Clase Nat Che. Baeing Ca. BA 1.55 30.48 4,531,600 64.78 63.70 64.62 +.93 Eli Lily and Cu. LLY 2.60 29.71 3,765,700 58.98 58.21 58.52 +.16 H. J. Heinz and Ca. HNZ 3.30 15.33 1,350,200 36.55 36.26 36.33 +.21 Kellog Cu. K 2.22 20.50 1,990,600 45.72 45.20 45.50 +.24 -Refer to Table 13-2. Which company had the lowest dollar dividend?

Which of the following would necessarily create a surplus at the original equilibrium interest rate in the loanable funds market?

Consider three different closed economies with the following national income statistics. Country A has taxes of $40 billion, transfers of $20 billion, and government expenditures on goods and services of $30 billion. County B has private savings of $60 billion, and investment expenditures of $50 billion. Country C has GDP of $300 billion, investment of $70, consumption of $180 billion, taxes of $60 billion and transfers of $20 billion. From this information we know that there is a $10 billion government budget deficit for

For a closed economy, GDP is $11 trillion, consumption is $7 trillion, taxes are $2 trillion and the government runs a deficit of $1 trillion. What are private saving and national saving?

A policy that induces people to save more shifts

A bond buyer is a

If there is surplus of loanable funds, then

Which of the following statements is correct?

The country of Yokovia does not trade with any other country. Its GDP is $20 billion. Its government collects $4 billion in taxes and pays out $3 billion to households in the form of transfer payments. Consumption equals $15 billion and investment equals $2 billion. What is public saving in Yokovia, and what is the value of the goods and services purchased by the government of Yokovia?

Corporations receive no proceeds from the resale of their stock.