A theory of saving is necessarily a theory of consumption, because ________
A) by definition, any unit of disposable income that is not a consumption expenditure is a unit of saving
B) consumption decisions are made after saving has occurred
C) private saving is equal to private investment
D) the goal of consumption choices is to achieve the desired level of savings
A
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When the real interest rate increases
A) the supply of loanable funds curve shifts rightward. B) the supply of loanable funds curve shifts leftward. C) there is a movement upward along the supply of loanable funds curve. D) there is a movement downward along the supply of loanable funds curve.
Which scenario has a higher present discounted value (assume interest is compounded annually); $100 received in 3 years if the interest rate is 8% or $90 received in 2 years if the interest rate is 7.25%?
A. $100 owed in 3 years B. $90 owed in 2 years C. Both scenarios have the same present discounted value. D. It cannot be determined with information provided.
Suppose the Fed purchases $100 million of U.S. government securities from the public. How will this affect the money supply and the national debt?
a. The money supply will increase; the national debt will decline. b. The money supply will decline; the national debt will increase. c. The money supply will increase; the national debt will be unaffected. d. The money supply will decrease; the national debt will be unaffected.
Refer to the diagram pertaining to two nations and a specific product. Lines FC and GD are:
A. domestic supply curves for two countries.
B. domestic demand curves for two countries.
C. import demand curves for two countries.
D. export supply curves for two countries.