Macro Quiz Chapters 7,8,9
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mymessenger007 on April 25, 2012
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33 terms
Terms | Definitions |
|---|---|
 1. The key indicator of a country's living standard and economic well being is? | real GDP per person |
| 2. The payment of interest not only on the original deposit, but on all previously accumulated interest is called? | compound interest |
| 3. A nation's standard of living, as measured by real GDP per person, increases? | if either average labor productivity and/or the share of population employed increase. |
| 4. If the share of population employed in two countries is the same, average living standards will be higher in the country with? | higher average labor productivity |
| 5. Growth in the share of population employed in the United States is likely to decline in the future because? | an increasing proportion of those currently employed will be retiring |
| 6. The talents, training, and education of workers is called? | human capital |
| 7. Getting a college degree is an example of investing in? | human capital |
| 8. Which of the following is an example of investing in physical capital? | a firm purchases new equipment for a manufacturing process. |
| 9. Increasing the capital available to the workforce, holding other factors constant, tends to __________ total output at a(n) __________ rate? | increase: decreasing |
| 10. Usually an abundance of natural resources __________ average labor productivity? | increases |
| 1. Savings equal? | current income minus spending on current needs. |
| 2. Wealth equals? | assets minus liabilities. |
| 3. The debt one owes are called? | liabilities |
| 4. Which of the following is an asset of a family? | share of stock. |
| 5. Which if the following is a liability of a family? | mortgage |
| 6. Charles has the following assets and liabilities: *Two cars= $10,000 *House= $200,000 *Mortgage= $100,000 *Cash= $1,000 *Car Loans= $3,000 *Checking Account Balance= $2,000 *Credit Card Balance= 1,000 * What is the value of Charles liabilities? | $104,000 |
| 7. Which of the following is a flow? | savings |
| 8. Which of the following is a stock? | wealth |
| 9. Capital gains are? | increases in the value of existing assets. |
| 10. Jay owns a classic car he purchased for $50,000. At a car rally he is offered $75,000 for the car. Based on this information? | Jay has a $25,000 capital gain. |
| 11. Savings for protection against unexpected setbacks, such as the loss of a job or a medical emergency, is called __________ savings? | precautionary |
| 1. The financial system consists of financial __________, such as commercial banks, and financial __________, such as the stock market. | institutions: markets |
| 2. Privately owned firms that accept deposits from individuals and businesses and use those deposits to make loans are called? | commercial banks |
| 3. Banks help savers find productive uses for their funds because banks have specialized in? | gathering information about and evaluating potential borrowers. |
| 4. Two reasons savers keep deposits at banks are to? | earn a return on their savings and to facilitate making payments. |
| 5. The principal amount of a bond is the amount? | originally lent |
| 6. The coupon rate is the? | interest rate promised when a bond is issued. |
| 7. If the principal amount of a bond is $2,000,000, the coupon rate is 6%, and the inflation rate is 4%, then the annual coupon payment made to the holder of the bond is? | $120,000 |
| 8. When the interest rate on newly issued bonds increases, the price of existing bonds? | decreases |
| 9. A regular payment received by stockholders for each share they own is called a? | dividend |
| 10. A financial intermediary that sells shares in itself to the public, and then uses the funds to buy a wide variety of financial assets is called a? | mutual fund |
| 11. Money serves as a medium of exchange when? | it is used to purchase goods and services. |
| 12. The main disadvantage of using money as a store of value is that? | other assets pay relatively higher rates of interest than money. |
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