Question

17.       What does stock represent?

            a.         certificate of insurance

            b.         a bond that never matures

            c.         ownership in a company

            d.         debt finance

Answer:

18.       Reggie’s income exceeds his expenditures. Which statement best describes Reggie?

            a.         He is a saver who demands money from the financial system.

            b.         He is a saver who supplies money to the financial system.

            c.         He is a borrower who demands money from the financial system.

            d.         He is a borrower who supplies money to the financial system.

Answer:

19.       When a country saves a larger portion of its GDP, will it have more or less investment?

            a.         It will have less investment, and so it will have more capital and higher productivity.

            b.         It will have less investment, and so it will have less capital and higher productivity.

            c.         It will have more investment, and so it will have more capital and higher productivity.

            d.         It will have more investment, and so it will have less capital and higher productivity.

Answer:

20.       Which expression represents national saving in a closed economy?

            a.         Y – I – G – NX

            b.         Y – C – G

            c.         Y – I – C

            d.         G + C – Y

Answer:

Answer 1

(17) (c)

A stock or share represents ownership in a company.

(18) (b)

When income exceeds expenditure, the balance amount is savings, which is a supply of funds in financial system.

(19) (a)

Higher savings rate increases capital and investment, boosting productivity.

(20) (b)

National saving = Private saving + Public saving = (Y - C) - G