Macroeconomics ch 10 Quiz
If the government's expenditures exceeded its receipts, it would likely
sell bonds directly to the public.
For a closed economy, GDP is $31 trillion, consumption is $7 trillion, taxes are $3.0 trillion and the government runs a surplus of $4 trillion. What are private saving and national saving?
$21.0 trillion and $25.0 trillion, respectively
Consider a closed economy. If national saving is greater than zero, which of the following must be true?
Y - C - G > 0
Refer to Figure 9-2 . Without trade, consumer surplus amounts to
$9,720.
Refer to Figure 9-2 . Without trade, producer surplus amounts to
$9,720.
If the nominal interest rate is 8 percent and the inflation rate is 3 percent, then the real interest rate is
5 percent
Alex buys 1,000 shares of stock issued by Greg Brewing. In turn, Greg uses the funds to buy new machinery for one of its breweries.
Alex is saving; Greg is investing.
Assume, for India, that the domestic price of copper without international trade is lower than the world price of copper. This suggests that, in the production of copper,
India has a comparative advantage over other countries and India will export copper
In a closed economy, what does the difference between the tax revenue and government purchases, (T − G), represent?
Public saving
For an open economy, the equation Y = C + I + G + NX is an identity. If we define national saving, S, as the total income in the economy that is left after paying for consumption and government purchases, then for an open economy, it is true that
S = I + NX.
Consider a closed economy. In which of the following cases national saving must equal private saving?
The government's tax revenue is equal to its expenditures.
If there is a shortage of loanable funds, then the quantity of loanable funds
demanded is greater than the quantity of loanable funds supplied and the interest rate will rise.
Institutions that help to match one person's saving with another person's investment are collectively called the
financial system
If there is a shortage of loanable funds, then
neither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium.
Assume, for Brazil, that the domestic price of apples without international trade is higher than the world price of apples. This suggests that, in the production of apples,
other countries have a comparative advantage over Brazil and Brazil will import apples.
An increase in the government's budget surplus means public saving is
positive and increasing
In a closed economy, national saving equals
private saving plus public saving.
If the supply for loanable funds shifts to the left, then the equilibrium interest rate
rises and the quantity of loanable funds falls.
Given that Sarah's income exceeds her expenditures, Sarah is best described as a
saver or as a supplier of funds.
In a closed economy, public saving is the amount of
tax revenue that the government has left after paying for its spending.
In a closed economy, private saving is
the amount of income that households have left after paying for their taxes and consumption.
National saving is
the total income in the economy that remains after paying for consumption and government purchases
