Since 1970, ______________ of the United States has grown each year and _____________ has experienced fluctuations.

net investment; gross investment
gross investment; net investment
gross investment; depreciation
the capital stock; net investment

If gross investment exceeds depreciation, then net investment is _______ and the capital stock _______.

positive; increases
negative; increases
positive; decreases
negative; decreases

If the nominal interest rate is 7 percent a year and the inflation rate is 2 percent a year, then the real interest rate is approximately _________ a year.

5 percent
9 percent
14 percent
4 percent

A rise in the real interest rate _________ the investment demand curve, and a decrease in the expected profit rate _________ the investment demand curve.

creates a movement along; shifts
shifts; shifts
creates a movement along; creates a movement along
shifts; creates a movement along

A decrease in disposable income _______________________.

shifts the saving supply curve leftward
results in movement up the saving supply curve
shifts the saving supply curve rightward
has no effect on the saving supply curve

Saving supply in the United States did not change much between 1980 and 1983 because

increases in expected future income encouraged consumption rather than saving
future profits were expected to be fairly steady
the real interest rate remained fairly steady
disposable income was fairly steady

If world saving exceeds world investment, then _______________________.

the real interest rate will fall
firms will increase their investment demand
people will save less
the real interest rate will rise

If world investment demand increases, ________________.

investment in every country will increase
the real interest rate won't change
the real interest rate will fall
the real interest rate will rise

An increase in the expected profit rate will _____________. The real interest rate will ____________ and ___________________.

decrease saving supply; rise; saving will increase
increase saving supply; fall; investment will decrease
increase investment demand; rise; saving will increase
increase investment demand; fall; investment will decrease

If at the world real interest rate, U.S. saving exceeds U.S. investment, then the _______________.

United States has a budget deficit
United States borrows from the rest of the world
United States lends some of its saving to the rest of the world
U.S. real interest rate will rise

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