1. Net capital inflow equals: A. consumption B. consumption plus government spending C. national savings D....

1. Net capital inflow equals:

A. consumption

B. consumption plus government spending

C. national savings

D. imports minus exports

2. If there is an increase in the government budget deficit, the ____ loanable funds will____, interest rate will____, and the amount of borrowing will_____

A. supply of; increase; decrease; increase

B. demand for; increase; increase; increase;

C. demand for; decrease; decrease; decrease;

D. supply of; decrease; increase; decrease

3. Explain the effect on a company's stock price today of the following event, other things held constant.

Several companies in the same sector announce surprisingly higher sales.

A. The stock price will not change

B. The stock price will rise

C. The stock price will fall.

Solutions

Expert Solution

Answer:

Net capital inflow equals: imports minus exports

Correct option D] imports minus exports

Explanation: Capital inflow means the amount of money increases which is available from foreign sources for the purchase of local capital assets.Net Capital inflow is the difference between import and exports of the nation.

If there is an increase in the government budget deficit, the supply of loanable funds will decrease, interest rate will increase, and the amount of borrowing will decrease.

Correct answer: D. supply of; decrease; increase; decrease

Several companies in the same sector announce surprisingly higher sales.

Correct answer: B. The stock price will rise

Higher sales in the same Sector means a bright future and the sector is doing well These higher sales would convert into higher profits eventually . And the stock prices are based in future expectation, so the stock prices increase .

Rahul Sunny answered 1 year ago

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