mac10L1
1
The capital stock is the ______________________.
quantity of stocks and bonds in existence
purchase of stock certificates
quantity of plant, equipment, buildings, and inventories
purchase of new plant and equipment
2
Gross investment is ________________________.
the purchase of stocks
equal to net investment minus depreciation
the purchase of bonds
the purchase of new capital
3
Net investment is equal to __________ minus ______________.
gross investment; depreciation
investment; depreciation
gross investment; capital stock
capital; depreciation
4
The opportunity cost of investment is the _____________________.
real interest rate
inflation rate
the sum of the real interest rate and the inflation rate
nominal interest rate
5
Investment demand is the relationship between ______________ and the ______________, other things remaining the same.
private investment plus government investment; real interest rate
gross investment of firms; price level
gross investment by firms; real interest rate
private investment plus government investment; nominal interest rate
6
National saving is _____________________.
the sum of private saving and government saving
equal to exports minus imports
financed by private investment
equal to total private savings accounts in banks
7
The saving supply is the relationship between saving and _______, other things remaining the same.
the real interest rate
real GDP
the inflation rate
the price level
8
As the _______ rises, the quantity of saving ______________, other things remaining the same.
real interest rate; increases
inflation rate; increases
nominal interest rate; increases
real interest rate; decreases
9
The real interest rate is determined by ______________________.
world saving supply and world investment demand
world demand for capital
U.S. demand for capital
U.S. saving supply and U.S. investment demand
10
The crowding-out effect occurs when a government deficit decreases ______________________.
investment
imports
private saving
consumption expenditure
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