ch13 - Chapter 13 Saving, Investment, and the Financial...

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Unformatted text preview: Chapter 13 Saving, Investment, and the Financial System MULTIPLE CHOICE 1 . When opening a restaurant you may need to by ovens, freezers, tables, and cash registers. Economists call these expenditures a. capital investment. b. investment in human capital. c. business consumption expenditures. d. None of the above are correct. 2 . When a country saves a larger portion of its GDP, it will have a. less investment, and so have more capital and higher productivity. b. less investment, and so have less capital and higher productivity. c. more investment, and so have more capital and higher productivity. d. more investment, and so have less capital and higher productivity. 3 . Institutions in the economy that help to match one person's saving with another person's investment are collectively called the a. Federal Reserve system. b. banking system. c. monetary system. d. financial system. 4 . Alfreds income exceeds his expenditures. Alfred is a a. saver who demands money from the financial system. b. saver who supplies money to the financial system. c. borrower who demands money from the financial system. d. borrower who demands money from the financial system. 5 . Lucy wants to start her own psychiatric practice, but her expenditures exceed her income. Lucy is a a. saver who demands money from the financial system. b. saver who supplies money to the financial system. c. borrower who demands money from the financial system. d. borrower who supplies money to the financial system. 6 . A bond is a a. financial intermediary. b. certificate of indebtedness. c. certificate of partial ownership in an enterprise. d. None of the above are correct. 7 . A certificate of indebtedness that specifies the obligations of the borrower to the holder is called a a. bond. b. stock. c. mutual fund. d. All of the above are correct. 8 . If the governments expenditures exceeded its receipts, it would likely a. lend money to a bank or other financial intermediary. b. borrow money from a bank or other financial intermediary. c. directly buy bonds from the public. d. directly sell bonds to the public. 9 . If Microsoft sells a bond they are a. borrowing directly from the public. b. borrowing indirectly from the public. c. lending directly to the public. d. lending indirectly to the public. 10 . Which of the following is correct? a. The maturity of a bond refers to the amount to be paid back....
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This note was uploaded on 04/14/2010 for the course ECON Econ 102 taught by Professor Kimball during the Winter '09 term at Harvard.

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ch13 - Chapter 13 Saving, Investment, and the Financial...

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