hmk 13

Suppose the economy is closed with national saving of $3 trillion, consumption of $10 trillion, and government spending of $4 trillion. What is GDP? a $3 trillion. b $9 trillion. c $11 trillion. d $17 trillion.

$17 trillion.

In a small closed economy, investment is $50 billion, and private saving is $45 billion. What are public saving and national saving? a $5 billion and $45 billion b -$5 billion and $45 billion c $5 billion and $50billion d -$5 billion and $50billion

$5 billion and $50billion

Suppose the economy is closed and consumption is $8 million, taxes are $2 million, and government spending is $1.75 million. If national saving amounts to $1.25 million, then what is GDP?a $9 million. b $9.5 million. c $13 million. d $11 million.

$11 million.

Which of the following is both a financial institution and a financial intermediary? a Commercial banks b Stock exchanges c The bond market d All of the above are correct.

Commercial banks

What would happen in the market for loanable funds if the government were to increase the tax on interest income? a Interest rate would rise. b Interest rate would be unaffected. c Interest rate would fall. d The effect on the interest rate if uncertain.

Interest rate would rise.

Given that Monika's income exceeds her expenditures, Monika is best described as a: a Saver or as a supplier of funds. b Saver or as a demander of funds. c Borrower or as a supplier of funds. d Borrower or as a demander of funds.

Saver or as a supplier of funds.

A closed economy: a does not engage in international trade of goods and services. b does not engage in international borrowing or lending. c both A and B. d engages in international borrowing and lending.

both A and B.

In a closed economy, national saving is: a usually greater than investment. b equal to investment. c usually less than investment because of taxes. d always less than investment.

equal to investment.

When public saving falls by $2 billion, and private saving falls by $1 billion in a closed economy, then a investment falls by $1 billion. b investment falls by $3 billion. c investment increases by $1 billion. d investment falls by $2 billion.

investment falls by $3 billion.

The source of the supply of loanable funds: a is saving and the source of demand for loanable funds is investment. b is investment and the source of demand for loanable funds is saving. c and the demand for loanable funds is saving. d and the demand for loanable funds is investment.

is saving and the source of demand for loanable funds is investment.

According to the definitions of private and public saving, if Y, C, G remain the same, an increase in taxes T will: a raise both private and public saving. b raise private and lower public saving. c lower private and raise public saving. d lower both private and public saving.

lower private and raise public saving.

Other things the same, when the interest rate rises, a people would want to lend more, making the supply of loanable funds increase. b people would want to lend less, making the supply of loanable funds decrease. c people would want to lend more, making the quantity of loanable funds supplied increase. d people would want to lend less, making the quantity of loanable funds supplied decrease.

people would want to lend more, making the quantity of loanable funds supplied increase.

n a closed economy, what does (Y - T - C) represent? a national saving b tax revenue c public saving d private saving

private saving

In a closed economy, what does (T - G) represent? a national saving b investment c private saving d public saving

public saving

Suppose that a country has only a sales tax. Now assume that it replaces the sales tax with an income tax that includes a tax on interest income. This would make equilibrium interest rate: a and the equilibrium quantity of loanable funds rise. b rise and the equilibrium quantity of loanable funds fall. c fall and the equilibrium quantity of loanable funds rise. d and the equilibrium quantity of loanable funds fall.

rise and the equilibrium quantity of loanable funds fall.

If US Congress instituted an investment tax credit, then the equilibrium quantity of loanable funds would: a rise. b fall. c be unchanged. d move in an uncertain direction.

rise.

If the supply for loanable funds shifts to the left, then the equilibrium interest rate: a and quantity of loanable funds rises. b and quantity of loanable funds falls. c rises and the quantity of loanable funds falls. d falls and the quantity of loanable funds rises.

rises and the quantity of loanable funds falls.

A policy than induces people to save more money shifts: a the supply of loanable funds rightward and increases investment. b the supply of loanable funds leftward and decreases investment. c the supply of loanable funds rightward and decreases investment. d the supply of loanable funds leftward and increases investment.

the supply of loanable funds rightward and increases investment.

Which of the following could explain a decrease in the interest rate and an increase in the equilibrium quantity of investment? a the supply of loanable funds shifted to the right. b the supply of loanable funds shifted to the left. c the demand of loanable funds shifted to the right. d the demand of loanable funds shifted to the left.

the supply of loanable funds shifted to the right.

If the government institutes policies that diminish incentives to save, then in the loanable funds market: a the demand for loanable funds shifts rightward. b the demand for loanable funds shifts leftward. c the supply of loanable funds shifts rightward. d the supply of loanable funds shifts leftward.

the supply of loanable funds shifts leftward.

Other things the same, an increase in the interest rate a would shift the demand for loanable funds to the right. b would shift the demand for loanable funds to the left. c would increase the quantity for loanable funds demanded. d would decrease the quantity for loanable funds demanded.

would decrease the quantity for loanable funds demanded.

Norberto is opening a bicycle shop, and his monthly expenditures to get the shop up and running exceed his monthly income. Norberto is best described as a: a Saver or as a supplier of funds. b Saver or as a demander of funds. c Borrower or as a supplier of funds. d Borrower or as a demander of funds.

Borrower or as a demander of funds.

Financial intermediaries are a The same as financial markets. b Individuals who make profits by buying a stock low and selling it high. c A more general name for financial assets such as stocks, bonds, and checking accounts. d Financial institutions through which savers can indirectly provide funds to borrowers.

Financial institutions through which savers can indirectly provide funds to borrowers.

Institutions that help to match one person's saving with another person's investment are collective called the a Federal Reserve system. b Banking system. c Monetary system. d Financial system

Financial system

Which of the following equations represents GDP for a closed economy? a Y = C + I + G + T b S = I - G c I = Y - C + G d Y = C + I + G

Y = C + I + G