. Tutor: A.

Laidlow

ICCI: Macroeconomics Final Exam: June 18, 2014

Duration 2 hours
Savings and Invstinen(

I . A corp oration's earnings are . .

.
a. the amount of rev.enue it ieceives for t he saJe_of its products minus itf> co sts of production
. as 'rneasured by its. accoti nta n_ ,ts ini1rns the divide9ds pc;1id out.
b. the amo unt ofrevenuy it receives for the saJe:of its produyts minus its direct and indirect
costs of prqdi.tction as meaLired by its econ61nisis minus the dividends paid o ut. :
{i)' the ,amount of.re.venue it receive\for the saJe of its products minus i ts c:osts of production .

.
asmeasuied'by frs accountants. .

1 d. the amount, of revenue it recivJs for t he sai its: products minus its direct and ii1direct
costs of production as measured.by its econornjsts:_ :

!_

of

2. The amo unt of revenue a firm receives for the.sale of i(s. products minus its c osts of production as measured by its

acco untants is the firm's

/ (!) earnings.
._/'
b. retained earnings._
C.
economic, Or real, profit.
d. dividend.
3. A U.S.Treasury bond is a
a. store of value and common medium of exchange.
@ store of value, but not a common medium of exchange.
c. a common medium of exchange, but n ot a s.tore of value.
d. n either a store of value nor a common niedium of exchange.
4. If a firm wants to borrow it can
(a) supply bonds by selling them.
/ b. SUJ:>ply bonds by buying them.
c. demand bonds by selling them.
cl. demand b onds by buying them.
5. F or an imagina1y closed economy, T = $5,000; S =$11,000; C =$50,000; and the government is running a budget

deficit of $1,000. Then

=
/ a. private saving $ I 0,000 and GDP= $54,.000.
V b. private saving = $10,000 and GDP = $58,000.
private saving = $12,000 and GDP= $67,000 ..
S,1:00
cl. private saving = $12,000 and GDP =.$72,000..
..,, : .
6. If an ec onomy is closed and if it has no government, then
a. natio nal saving = private saving.
/
b. to tal income = consumption + investment.
(./
c. saving = total inc ome - consumption.
@ All of the above are correct.

_i2 7 interpre he meaning f"l anable funds" as he

#;fl w f resources available f m private saving.
f res w-ces available to fund priva e investment.
'\I! c. flreswurces
b rrowed by private invest rs and by governmen .
t t

r
o

d. res ources lent by private ii1Vestors and by government .