Ch31 Impacts – Government Borrowing

*Multiple Choice Questions*

*1.* When governments are borrowers in financial capital markets, which of the following is least likely to be a possible source of the funds from a macroeconomic point of view?

A. central bank prints more money
B. increase in household savings
C. decrease in borrowing by private firms
D. foreign financial investors

Answer: A Reference:

Explanation:

Type: Multiple Choice

*2.* A country’s economic data indicates that there has been a substantial reduction in the financial capital available to private sector firms. Which of the following most likely had the greatest influence on this economy?

A. especially large and sustained household saving
B. increased borrowing by private firms
C. reduction in influx of funds for foreign financial investors
D. especially large and sustained government borrowing

Answer: D Reference:

Explanation:

Type: Multiple Choice

*3.* If a country’s economic data shows private savings of $300 million, government spending of $350 million, tax revenue of $400 million, and a trade surplus of $75 million, then what does investment equal?

A. $775 million
B. $475 million
C. $275 million
D. $700 million

Answer: C Reference:

Explanation:

Type: Multiple Choice

*4.* If a country’s economic data shows private savings of $500 million, government spending of $300 million, tax revenue of $400 million, and a trade surplus of $100 million, then what does investment equal?

A. $600 million
B. $500 million
C. $700 million
D. $900 million

Answer: B Reference:

Explanation:

Type: Multiple Choice

*5.* If a country’s economic data shows private savings of $400 million, government spending of $250 million, tax revenue of $400 million, and a trade surplus of $175 million, then what does investment equal?

A. $550 million
B. $425 million
C. $800 million
D. $375 million

Answer: D Reference:

Explanation:

Type: Multiple Choice

*6.* If a country’s economic data shows that private savings equal $250 million, government spending equals $400 million, taxes equal $350, and the trade surplus equals $150 million, then what does investment equal?

Tags: