1. Which of the following is considered investment spending in macroeconomics? (
ID: 1177173 • Letter: 1
Question
1. Which of the following is considered investment spending in macroeconomics? (Points : 2)
GM builds a new plant to manufacture automobiles.
Ryan Jones buys some GM stock.
Ryan Jones buys some GM bonds.
Ryan Jones buys some GM stock and bonds.
2. A budget surplus would exist when which of the following occurs? (Points : 2)
Taxes are greater than government spending.
Taxes are less than government spending.
Taxes are less than government spending plus investment.
Investment is less than government spending less taxes.
3. To help increase investment spending, the government can: (Points : 2)
lower taxes on consumption, so that disposable income rises.
lower taxes on the returns from savings, so that total savings increase and the interest rate falls.
raise taxes on the returns from bonds while lowering taxes on stock dividends.
lower taxes on investment spending while raising taxes on savings, so that total tax revenue remains constant.
4. If there is an increase in the government budget deficit: (Points : 2)
the demand for loanable funds will increase, interest rates will increase, and the amount of borrowing will increase.
the demand for loanable funds will decrease, interest rates will decrease, and the amount of borrowing will decrease.
the supply of loanable funds will increase, interest rates will decrease, and the amount of borrowing will increase.
the supply of loanable funds will decrease, interest rates will increase, and the amount of borrowing will decrease.
5. In the market for loanable funds, suppose the current interest rate is 5%. At a rate of 5%, investors wish to borrow $100 million and savers wish to save $125 million. We would expect: (Points : 2)
the interest rate to fall as there is currently a shortage of loanable funds.
the interest rate to rise as there is currently a surplus of loanable funds.
the interest rate to rise as there is currently a shortage of loanable funds.
the interest rate to fall as there is currently a surplus of loanable funds.
6. The price determined in the market for loanable funds is: (Points : 2)
the margin call.
the profit rate.
the transaction fee.
the interest rate.
7. Crowding out is a phenomenon: (Points : 2)
where an increase in government's budget surplus decreases the overall investment spending.
where overproduction in the goods market leads to a sharp drop in the aggregate price level.
where an increase in government's budget deficit causes the overall investment spending to fall.
where an increase in imports causes the overall domestic production to fall.
8. From the standpoint of economic growth, banks are important to: (Points : 2)
fight inflation.
keep interest rates low.
channel savings into investment.
channel investment into savings.
9. Which of the following is NOT one of the three tasks of a financial system? (Points : 2)
transactions costs reduction
risk management
provide liquidity
determining fiscal policy
10. Which of the following portfolios is the most diversified in terms of risk? (Points : 2)
$100,000 worth of stock in ten different companies in the same industry
$100,000 worth of stock in ten different companies in two different industries
$100,000 worth of stock in ten different companies in five different industries
$100,000 worth of stock in one company that sells ten different products
11. When you take out a loan from a bank, it is: (Points : 2)
an asset to you and a liability to the bank.
an asset to you and an asset to the bank.
a liability to you and a liability to the bank.
a liability to you and an asset to the bank.
12. Which of the following financial assets is likely to be the most liquid? (Points : 2)
stocks
bonds
mutual funds shares
bank demand deposits
13. The financial system performs certain tasks in order to make the financial market more efficient. Which one of the following is NOT one of these tasks? (Points : 2)
reducing risk
reducing menu costs
reducing transaction costs
providing liquidity
14. Which of the following qualify as an asset from the viewpoint of a household? (Points : 2)
a house
mortgage
credit card debt
car loan
15. Samantha is asking her employer for a 5% raise for the coming year. If the inflation rate during the next year is 5.5%, then her real wage will: (Points : 2)
increase by 5%.
decrease by .5%.
decrease by 5%.
increase by .5%.
16. The MPS plus the MPC must equal: (Points : 2)
zero.
one.
income.
saving.
17. If the MPS = .1, then the value of the multiplier equals: (Points : 2)
1.
5.
9.
10.
18. If the MPC is 0.8, then the multiplier is: (Points : 2)
4.
5.
8.
10.
1. Which of the following is considered investment spending in macroeconomics? (Points : 2)
GM builds a new plant to manufacture automobiles.
Ryan Jones buys some GM stock.
Ryan Jones buys some GM bonds.
Ryan Jones buys some GM stock and bonds.
Explanation / Answer
1. A
2. A
3. lower taxes on the returns from savings, so that total savings increase and the interest rate falls.
4. the supply of loanable funds will decrease, interest rates will increase, and the amount of borrowing will decrease
5. the interest rate to fall as there is currently a surplus of loanable funds.
6. D
7. where an increase in government's budget deficit causes the overall investment spending to fall
8. channel savings into investment
9. determining fiscal policy
11. loan is a liability for the loan taker and asset for the bank
12. bank demand deposits
13. providing liquidity
14. a house (not sure though)
15. decrease by 0.5%
16. one
17. 10
18. 5
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.