Savings, Investment Spending, and the Financial System - End of Chapter Questions12. Indicate whether each of the following is an example of investment spending, investing in financial assets, or investing inphysical assets.Rupert Moneybucks buys 100 shares of existing Coca-Cola stock.Rhonda Moviestar spends $10 million to buy a mansion built in the 1970sRonald Basketballstar spends $10 million to build a new mansion with a view of the Pacific OceanRawlings builds a new plant to make catcher's mitts.Russia buys $100 million in U.S. government bondsMatch each person, company, and country to the kind of action they have takenInvestment spendingInvesting in financial assetsInvesting in physical assetsAnswer BankRupert MoneybucksRhonda MoviestarRonald BasketballstarRawlingsRussia

a) When Rupert Moneybucks buys 100 shares of existing Coca-Cola stock, he is investing in a…

Answered: Savings, Investment Spending, and the…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter15: Monetary Policy

Section: Chapter Questions

Problem 12QP

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Which of the following situations represent investment or saving? Explain. Your family takes out a mortgage and buys a new house. You use your $200 paycheck to buy stock in AT&T. Your roommate earns $100 and deposits it in his account at a bank. You borrow $1,000 from a bank to buy a car to use in your pizza delivery business. For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain. A bond that repays the principal in year 2030 or a bond that repays the principal in year 2040. 2 . A bond from Coca-Cola or a bond from a software company you run in your garage.
For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain! a bond of the U.S. government or a bond of an East European government a bond that repays the principal in year 2015 or a bond that repays the principal in year 2040 a bond from Coca-Cola or a bond from a software company you run in your garage a bond issued by the federal government or a bond issued by New York State 2. Many workers hold large amounts of stock issued by the firms at which they work. Why do you suppose companies encourage this behavior? Why might a person not want to hold stock in the company where he works? 3. Economists in Funlandia, a closed economy, have collected the following information about the economy for a particular year: Y = 10,000; C = 6,000; T = 1,500; G = 1,700. The economists also estimate that the investment function is: I =3,300 –100r where r is the country’s real interest rate, expressed as a percentage. Calculate private saving, public saving,…
Responding to the economic conditions in the United Kingdom in 1932, Friedrich Hayek and his colleagues believed that it was important to boost aggregate demand, because doing so would reduce private savings. It was important to reduce private saving, because doing so would boost aggregate demand It was perilous to weaken private saving, because doing so might reduce government spending. it was perilous to weaken private saving, because doing so might reduce productive investment. Type the correct answer ASAP with proper explanation of the each option given. Thank you
Suppose Eric would like to use $6,000 of his savings to make a financial investment. One way of making a financial investment is to purchase stock or bonds from a private company. Suppose TouchTech, a hand-held computing firm, is selling bonds to raise money for a new lab—a practice known as (a. equity, b. debt) finance. Buying a bond issued by TouchTech would give Eric (a. a claim to partial ownership in, b. an IOU, or promise to pay, from) the firm. In the event that TouchTech runs into financial difficulty, (a. Eric and the other bondholders, b. the stockholders) will be paid first. Suppose instead Eric decides to buy 100 shares of TouchTech stock. Which of the following statements are correct? Check all that apply. a.TouchTech earns revenue when Eric purchases 100 shares, even if he purchases them from an existing shareholder. b. The Dow Jones Industrial Average is an example of a stock exchange where he can purchase TouchTech stock. c. An increase in the…
Choose the correct answer and write only the corresponding letter 1.3 The distinction between a flow and a stock is that: ⦁ a. A flow measures monetary values, while a stock measures real values, such as factory output; ⦁ b. A flow measures an account on a monthly basis, while a stock measures it on an annual basis; ⦁ c. A flow measures value in nominal terms, while a stock measures it in real terms; ⦁ d. A flow measures a quantity over a period of time, while a stock measures a quantity at a specific moment. 1.4 Which of the following represent injections into the circular flow of income and spending? ⦁ a. Exports and investment; ⦁ b. Government spending and imports; ⦁ c. Government spending and saving; ⦁ d. Imports and saving
According to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment? 2014 2015 2016 2017 2018
Briefly describe and explain the following investments terms. d) Government Bonds e) Stocks f) Present Value
12. Which of the following is most likely to cause an increase in demand for loanable funds? (A) Banks fail across the nation, and are unable to return their depositors’ money. (B) The Financial Post releases a widely-read article, claiming that consumer and business confidence have declined. (C) The government provides a large tax credit for those who save money in banks. (D) The government reduces taxes on businesses, making investment more profitable.
Use the concepts of income effect and subsitution effect to explain why the effect on desired savings of an increase in the expected real interest rate is potentially ambiguous. Draw the saving curve for when (a) subsitution effect dominates (b) income effect dominates. I need help with the graphs. Pls solve all for good rating
How do the sophisticated financial systems of modern economies affect the relationship between saving and investment?
It analyzes the responsibility of the financial system in the demand for investment versus the supply of savings.
Karrie is a golf pro, and after she paid taxes, her income from golf and her interest from financial assets totalled $2,500,000 in 2019. At the beginning of 2019, she owned $1,100,000 worth of financial assets. At the end of 2019, Karrie's financial assets were worth $1,300,000. How much did Karrie save during 2019?

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