A) the government has a budget surplus and investment is 1,000
B) the government has a budget surplus and investment is 2,000
C) the government has a budget deficit and investment is 1,000
D) the government has a budget deficit and investment is 2,000
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True/False
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Multiple Choice
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.
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Multiple Choice
A) tax reforms encouraged greater saving or the budget deficit became smaller.
B) tax reforms encouraged greater saving or investment tax credits were increased.
C) the budget deficit became larger or investment tax credits were increased.
D) the budget deficit became larger or tax reforms discouraged saving.
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Multiple Choice
A) $1,480.
B) $1,505.
C) $1,460
D) $1,455.
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Essay
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View Answer
Multiple Choice
A) Gross domestic product is both total income in an economy and total expenditures on the economy's output of goods and services.
B) In a closed economy net exports are zero.
C) National saving is the sum of private saving and public saving.
D) Purchases of capital goods are excluded from GDP.
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Multiple Choice
A) Term refers to the various characteristics of a bond, including its interest rate and tax treatment.
B) The term of a bond is determined entirely by its credit risk.
C) The term of a bond is determined entirely by how much sales charge the buyer of the bond pays when he or she purchases the bond.
D) Interest rates on long-term bonds are usually higher than interest rates on short-term bonds.
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Multiple Choice
A) both the government debt and interest rates increased between 2010 and 2011.
B) both the government debt and interest rates decreased between 2010 and 2011.
C) the government debt increased and interest rates decreased between 2010 and 2011.
D) the government debt decreased and interest rates increased between 2010 and 2011.
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Multiple Choice
A) firms are borrowing less and investment decreases.
B) firms are borrowing less and investment increases.
C) firms are borrowing more and investment increases.
D) firms are borrowing more and investment decreases.
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Multiple Choice
A) are not required to pay federal income tax on the interest income.
B) usually receive a higher interest rate compared to bonds issued by corporations.
C) usually receive a higher interest rate compared to stock issued by corporations.
D) pay taxes on the dividends earned from these bonds.
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True/False
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Multiple Choice
A) In a closed economy, equilibrium in the market for loanable funds occurs where saving = investment.
B) Investment is the source for the supply of loanable funds.
C) If there is a surplus in the market for loanable funds, the interest rate rises.
D) All of the above are correct
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Multiple Choice
A) the amount of income that households have left after paying for their taxes and consumption.
B) the amount of income that businesses have left after paying for the factors of production.
C) the amount of tax revenue that the government has left after paying for its spending.
D) always equal to investment.
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Multiple Choice
A) the credit risk associated with Bond A is lower than the credit risk associated with Bond B.
B) Bond A was issued by the city of Philadelphia and Bond B was issued by Red Hat Corporation.
C) Bond A has a term of 20 years and Bond B has a term of 2 years.
D) All of the above are correct.
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Multiple Choice
A) The longer term would tend to make the interest rate on the bond issued by Bluestone higher, while the higher risk would tend to make the interest rate lower.
B) The longer term would tend to make the interest rate on the bond issued by Bluestone lower, while the higher risk would tend to make the interest rate higher.
C) Both the longer term and the higher risk would tend to make the interest rate lower on the bond issued by Bluestone.
D) Both the longer term and the higher risk would tend to make the interest rate higher on the bond issued by Bluestone.
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Multiple Choice
A) If GDP is rising faster than debt, the government is, in some sense, living within its means.
B) The ratio of debt to GDP in the United States has always been less than one.
C) Debts during wars may distribute the burden of fighting the war more evenly across generations.
D) During times of peace in the United States, the ratio of debt to GDP sometimes rose.
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Multiple Choice
A) earnings of a company that are not paid out to stockholders.
B) the amount of revenue a corporation receives for the sale of its products minus its costs of production as measured by its accountants.
C) the single most important piece of information about a stock.
D) computed by multiplying the dividend yield by the price of the stock.
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True/False
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Multiple Choice
A) British perpetuities about to mature.
B) Disney issues new bonds with term of 7 percent.
C) Corporate bonds currently pay higher interest rates than government bonds.
D) Standard and Poor's judges new junk bond to have very low credit risk.
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