Question 1

Financial assets include all except which of the following:

Accepted Answer

A) productive facilities 
B) time deposits 
C) business loans 
D) consumer loans 
A) productive facilities 
B) time deposits 
C) business loans 
D) consumer loans A

Question 2

Savings are impacted only by cyclical movements in the economy.

Accepted Answer

A) True 
 B)False  False

Question 3

Most income for the Federal Government comes from:

Accepted Answer

A) corporate income taxes 
B) foreign income taxes 
C) government oil revenues 
D) military weapon sales 
E) none of the above 
A) corporate income taxes 
B) foreign income taxes 
C) government oil revenues 
D) military weapon sales 
E) none of the above E

Question 4

Which of the following expenditures account for the largest part of the Federal budget?

Accepted Answer

A) national defense 
B) interest on debt 
C) infrastructure investment 
D) government salaries 
E) none of the above 
A) national defense 
B) interest on debt 
C) infrastructure investment 
D) government salaries 
E) none of the above

Question 5

Gross domestic product is equal to the sum of all of the following EXCEPT:

Accepted Answer

A) personal consumption expenditures 
B) net exports 
C) government expenditures 
D) all of the above are included 
A) personal consumption expenditures 
B) net exports 
C) government expenditures 
D) all of the above are included

Question 6

Financial assets include claims in the form of obligations or liabilities issued by individuals, businesses, financial intermediaries, and governments.

Accepted Answer

A) True 
 B)False

Question 7

What type of investment occurs when claims to wealth in the form of financial assets are purchased or when debt obligations are repaid?

Accepted Answer

A) financial investment 
B) real investment 
C) contractual investment 
D) voluntary investment 
A) financial investment 
B) real investment 
C) contractual investment 
D) voluntary investment

Question 8

Tax reform in the form of lower personal income tax rates in the mid-1960s and in the 1970s may have contributed to a higher personal savings rate.

Accepted Answer

A) True 
 B)False

Question 9

When current savings of an economic unit exceed its direct investment in real assets, this is referred to as:

Accepted Answer

A) savings surplus 
B) savings deficit 
C) savings neutral 
D) savings inflation 
A) savings surplus 
B) savings deficit 
C) savings neutral 
D) savings inflation

Question 10

If an individual supplies funds to a business firm by purchasing bonds issued by the firm, the transaction:

Accepted Answer

A) creates two types of financial assets and two types of financial liabilities 
B) increases the liquidity and safety of principal for the individual 
C) initially occurs in the secondary market 
D) limits the ability of the security to be sold in the secondary market 
E) none of the above 
A) creates two types of financial assets and two types of financial liabilities 
B) increases the liquidity and safety of principal for the individual 
C) initially occurs in the secondary market 
D) limits the ability of the security to be sold in the secondary market 
E) none of the above

Question 11

Which of the following statements is most correct?

Accepted Answer

A) As levels of income decrease, an individual may dissave, that is, reduce further consumption expenditures rather than liquidate accumulated savings. 
B) The ability to provide adequate funds to meet our investment needs is dependent primarily on the savings of corporations and the government. 
C) In terms of the amount of funds raised annually in the credit markets, borrowing by the state and local government sector is smaller than borrowing by the U.S.government. 
D) All of the above statements are correct. 
A) As levels of income decrease, an individual may dissave, that is, reduce further consumption expenditures rather than liquidate accumulated savings. 
B) The ability to provide adequate funds to meet our investment needs is dependent primarily on the savings of corporations and the government. 
C) In terms of the amount of funds raised annually in the credit markets, borrowing by the state and local government sector is smaller than borrowing by the U.S.government. 
D) All of the above statements are correct.

Question 12

A business loan to Joe's Hardware Store by a bank represents which of the following?

Accepted Answer

A) a liability of the bank and an asset to Joe's 
B) an asset of the bank and a liability to Joe's 
C) liability to the bank and capital to Joe's 
D) liability to Joe's and capital to the bank 
A) a liability of the bank and an asset to Joe's 
B) an asset of the bank and a liability to Joe's 
C) liability to the bank and capital to Joe's 
D) liability to Joe's and capital to the bank

Question 13

All else the same, a trade deficit:

Accepted Answer

A) increases GDP 
B) decreases GDP 
C) have no impact on GDP 
D) two of the above 
E) not enough information to tell Same as prior item; do not care for "two of the above" items without specific reference to which items. 
A) increases GDP 
B) decreases GDP 
C) have no impact on GDP 
D) two of the above 
E) not enough information to tell Same as prior item; do not care for "two of the above" items without specific reference to which items.

Question 14

Capital formation is the process of constructing real property, manufacturing producers' durable equipment, and increasing business inventories.

Accepted Answer

A) True 
 B)False

Question 15

Which one the following four basic economic units consistently represents a savings surplus unit?

Accepted Answer

A) individuals 
B) business firms 
C) financial intermediaries 
D) governments 
E) none of the above 
A) individuals 
B) business firms 
C) financial intermediaries 
D) governments 
E) none of the above

Question 16

A saver who chooses securities as a savings medium and desires maximum safety of principal buys:

Accepted Answer

A) public utility stocks 
B) corporate stocks 
C) high-grade corporate bonds 
D) government bonds 
A) public utility stocks 
B) corporate stocks 
C) high-grade corporate bonds 
D) government bonds

Question 17

Which of the following statements is false?

Accepted Answer

A) The process of channeling savings into investment through the use of a financial institution or intermediary results in the creation of one type of financial asset and one type of financial liability. 
B) During the early years of the history of the United States, foreigners purchased significant volumes of federal government securities. 
C) The single most important use of funds raised in the credit markets is by the household sector. 
D) All of the above statements are false. 
A) The process of channeling savings into investment through the use of a financial institution or intermediary results in the creation of one type of financial asset and one type of financial liability. 
B) During the early years of the history of the United States, foreigners purchased significant volumes of federal government securities. 
C) The single most important use of funds raised in the credit markets is by the household sector. 
D) All of the above statements are false.

Question 18

Direct payments to individuals from the Federal government do not include:

Accepted Answer

A) Social Security payments. 
B) Medicare payments 
C) health expenditures 
D) all the above are included 
A) Social Security payments. 
B) Medicare payments 
C) health expenditures 
D) all the above are included

Question 19

Which of the following factors does not affect savings?

Accepted Answer

A) Levels of Income 
B) Economic expectations 
C) Cyclical influences 
D) Life stage of the individual or corporation 
E) Inflation rate 
A) Levels of Income 
B) Economic expectations 
C) Cyclical influences 
D) Life stage of the individual or corporation 
E) Inflation rate

Question 20

Which of the following statements is false?

Accepted Answer

A) The process of channeling savings into investment through the use of a financial institution or intermediary results in no real economic value 
B) During the early years of the history of the United States, foreigners purchased significant volumes of federal government securities. 
C) The single most important use of funds raised in the credit markets is by the household sector. dc.All Both of the above statements are false. 
D) Both statements A and B are true. 
A) The process of channeling savings into investment through the use of a financial institution or intermediary results in no real economic value 
B) During the early years of the history of the United States, foreigners purchased significant volumes of federal government securities. 
C) The single most important use of funds raised in the credit markets is by the household sector. dc.All Both of the above statements are false. 
D) Both statements A and B are true.

Financial assets include all except which of the following:

Savings are impacted only by cyclical movements in the economy.

Most income for the Federal Government comes from:

Which of the following expenditures account for the largest part of the Federal budget?

Gross domestic product is equal to the sum of all of the following EXCEPT:

Financial assets include claims in the form of obligations or liabilities issued by individuals, businesses, financial intermediaries, and governments.

What type of investment occurs when claims to wealth in the form of financial assets are purchased or when debt obligations are repaid?

Tax reform in the form of lower personal income tax rates in the mid-1960s and in the 1970s may have contributed to a higher personal savings rate.

When current savings of an economic unit exceed its direct investment in real assets, this is referred to as:

If an individual supplies funds to a business firm by purchasing bonds issued by the firm, the transaction:

Which of the following statements is most correct?

A business loan to Joe's Hardware Store by a bank represents which of the following?

All else the same, a trade deficit:

Capital formation is the process of constructing real property, manufacturing producers' durable equipment, and increasing business inventories.

Which one the following four basic economic units consistently represents a savings surplus unit?

A saver who chooses securities as a savings medium and desires maximum safety of principal buys:

Which of the following statements is false?

Direct payments to individuals from the Federal government do not include:

Which of the following factors does not affect savings?

Which of the following statements is false?

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 7: Savings and Investment Process

Financial assets include all except which of the following:

Savings are impacted only by cyclical movements in the economy.

Most income for the Federal Government comes from:

Which of the following expenditures account for the largest part of the Federal budget?

Gross domestic product is equal to the sum of all of the following EXCEPT:

Financial assets include claims in the form of obligations or liabilities issued by individuals, businesses, financial intermediaries, and governments.

What type of investment occurs when claims to wealth in the form of financial assets are purchased or when debt obligations are repaid?

Tax reform in the form of lower personal income tax rates in the mid-1960s and in the 1970s may have contributed to a higher personal savings rate.

When current savings of an economic unit exceed its direct investment in real assets, this is referred to as:

If an individual supplies funds to a business firm by purchasing bonds issued by the firm, the transaction:

Which of the following statements is most correct?

A business loan to Joe's Hardware Store by a bank represents which of the following?

All else the same, a trade deficit:

Capital formation is the process of constructing real property, manufacturing producers' durable equipment, and increasing business inventories.

Which one the following four basic economic units consistently represents a savings surplus unit?

A saver who chooses securities as a savings medium and desires maximum safety of principal buys:

Which of the following statements is false?

Direct payments to individuals from the Federal government do not include:

Which of the following factors does not affect savings?

Which of the following statements is false?

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters