Stocks And Surplus Economics(Economics ) Questions and Answers

Question 1. An increase in the budget surplus ?
  1.    Shifts the supply of loanable funds to the left and increase the real interest rate
  2.    Shift the supply of loanable funds to the right and reduces the real interest rate.
  3.    Shifts the demand for loanable funds to the right and increases the real interest rate.
  4.    Shifts the demand for loanable funds to the left and reduces the real interest rate
Explanation:-
Answer: Option B. -> Shift the supply of loanable funds to the right and reduces the real interest rate.
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 2. Which of the following sets of government policies is the most growth oriented ?
  1.    Lower taxes on the returns to saving, provide investment tax credits and lower the deficit
  2.    Increase tax on the returns to saving Provide investment tax credits and increase the deficit
  3.    Increase tax on the returns to saving Provide investment tax credits and lower the deficit
  4.    Lower taxes on the returns to saving Provide investment tax credits and increase the deficit
Explanation:-
Answer: Option A. -> Lower taxes on the returns to saving, provide investment tax credits and lower the deficit
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 3. If Pakistani citizens become less concerned with the future and save less at each real interest rate ?
  1.    Real interest rates rise and investment falls
  2.    Real interest rates rise and investment rises
  3.    Real interest rates fall and investment rises
  4.    Real interest rates fall and investment falls
Explanation:-
Answer: Option A. -> Real interest rates rise and investment falls
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 4. An increase in the budget deficit will ?
  1.    raise the real interest rate and decrease the quantity of loanable funds demanded for investment
  2.    lower the real interest rate and increase the quantity of loaable funds demanded for investment
  3.    raise the real interest rate and increase the quantity of loandable funds demanded for investment
  4.    lower the real interest rate and decrease the quantity of loanable funds demanded for investment
Explanation:-
Answer: Option A. -> raise the real interest rate and decrease the quantity of loanable funds demanded for investment
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 5. An increase in the budget deficit is ?
  1.    an increase in public saving
  2.    a decrease in private saving
  3.    None of these answers
  4.    a decrease in public savings
Explanation:-
Answer: Option D. -> a decrease in public savings
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 6. Credit risk refers to a bond’s ?
  1.    Probability of default
  2.    Price-earnings ratio
  3.    dividend
  4.    tax treatment
Explanation:-
Answer: Option A. -> Probability of default
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 7. National Saving (or just saving) is equal to ?
  1.    none of these answers
  2.    investment + consumption expenditures
  3.    private saving + public saving
  4.    GDP government purchases
Explanation:-
Answer: Option C. -> private saving + public saving
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 8. If government spending exceeds tax collections?
  1.    there is a budget deficit
  2.    None of these answers
  3.    There is a budget surplus
  4.    private saving is positive
Explanation:-
Answer: Option A. -> there is a budget deficit
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 9. Investment is ?
  1.    The purchase of goods and services
  2.    The purchase of capital equipment and structures
  3.    When we place our saving in the bank
  4.    The purchase of stocks and bonds
Explanation:-
Answer: Option B. -> The purchase of capital equipment and structures
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 10. If the public consumes Rs 100 billion less and the government purchases Rs100 billion more (other things unchanging), Which of the following statement is true ?
  1.    Saving is unchanged
  2.    There is an increased in saving and the economy should grow more quickly
  3.    There is a decrease in saving and the economy should grow more slowly
  4.    There is not enough information to determine what will happen to saving
Explanation:-
Answer: Option A. -> Saving is unchanged
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
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