Ch 25
Quiz by Chen, Clara
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9 questions
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- Q1Capital inflow is the:net inflow of funds into a country, or the total inflow of foreign funds into a country minus the total outflow of domestic funds to other countries.a) net inflow of foreign funds plus domestic savings into an economy.total outflow of domestic funds to other countries plus the net inflow of foreign funds into a country.total outflow of domestic funds to other countries minus the net inflow of foreign funds into a country.30s
- Q2Suppose a country exports $50 million worth of goods and services, while it imports $60 million worth of goods and services. This countryhas a positive capital inflow.has a negative capital inflow.lends funds to foreigners.30s
- Q3If the yearly nominal interest rate on a savings account is 5% and the rate of inflation over the same period is 2%, what is the real interest rate?3%5%2%30s
- Q4GDP is $12 trillion this year in a closed economy. Consumption is $8 trillion and government spending is $2 trillion. Taxes are $0.5 trillion. How much is private saving?$2.5 trillion$3.5 trillion$4 trillion30s
- Q5A budget surplus exists when:taxes are greater than government spending.taxes are less than government spending plus investment.taxes are less than government spending.120s
- Q6The demand for loanable funds is _____ sloping because _____ respond to lower interest rates by _____ their quantity demanded of loanable funds.downward; investors; increasingdownward; savers; increasingupward; investors; decreasing120s
- Q7The supply of loanable funds is _____ sloping because _____ respond to lower interest rates by _____ their quantity supplied of loanable funds.upward; savers; decreasingupward; savers; increasingupward; investors; decreasing120s
- Q8Economists use _____ as a model to explain how savers and borrowers come together to determine the equilibrium rate of interest.aggregate demand and aggregate supplythe money marketthe market for loanable funds120s
- Q9An increase in the level of business opportunity will generally _____ the loanable funds demand curve.right-shiftnot changeleft-shift120s