stocks Mcqs
1. An increase in the budget surplus ?
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A. Shift the supply of loanable funds to the right and reduces the real interest rate.

B. Shifts the demand for loanable funds to the right and increases the real interest rate.

C. Shifts the demand for loanable funds to the left and reduces the real interest rate

D. Shifts the supply of loanable funds to the left and increase the real interest rate

2. An increase in the budget deficit will ?
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A. lower the real interest rate and decrease the quantity of loanable funds demanded for investment

B. raise the real interest rate and increase the quantity of loandable funds demanded for investment

C. raise the real interest rate and decrease the quantity of loanable funds demanded for investment

D. lower the real interest rate and increase the quantity of loaable funds demanded for investment

3. An increase in the budget deficit is ?
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A. None of these answers

B. a decrease in public savings

C. a decrease in private saving

D. an increase in public saving

4. Which of the following sets of government policies is the most growth oriented ?
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A. Increase tax on the returns to saving Provide investment tax credits and lower the deficit

B. Increase tax on the returns to saving Provide investment tax credits and increase the deficit

C. Lower taxes on the returns to saving Provide investment tax credits and increase the deficit

D. Lower taxes on the returns to saving, provide investment tax credits and lower the deficit
5. If an increase in the budget deficit reduces national saving and investment we have witnessed a demonstration of ?
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A. the investment fund effect

B. equity finance

C. crowding out

D. intermediation

6. If Pakistani citizens become more thrifty we would expect ?
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A. The supply of loandable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to rise

B. The demand for loanable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to rise

C. The demand for loandable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to fall

D. The supply of loanable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to fall.
7. If government spending exceeds tax collections?
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A. private saving is positive

B. There is a budget surplus

C. None of these answers

D. there is a budget deficit
8. A financial intermediary is a middleperson between ?
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A. husbands and wives.

B. labor unions and firms

C. borrowers and lenders.

D. buyers and sellers

9. 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 ?
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A. There is not enough information to determine what will happen to saving

B. There is a decrease in saving and the economy should grow more slowly

C. Saving is unchanged

D. There is an increased in saving and the economy should grow more quickly

10. Which of the following statements is true ?
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A. Long-term bonds tend to pay less interest than short-term bonds

B. A stock index is a directory used to locate information about selected stocks.

C. Investment funds are riskier than single stock purchases because the performances of so many different firms can affect the return of a mutual fund

D. Government bonds pay less interest than comparable corporate bounds
11. National Saving (or just saving) is equal to ?
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A. GDP government purchases

B. private saving + public saving

C. none of these answers

D. investment + consumption expenditures

12. If the Supply of loanable funds is very inelastic (steep) Which policy would likely increase saving and investment the most ?
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A. a reduction in the budget deficit

B. None of the above

C. an investment tax credit

D. an increase in the budget deficit

13. Investment is ?
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A. When we place our saving in the bank

B. The purchase of capital equipment and structures

C. The purchase of goods and services

D. The purchase of stocks and bonds

14. If Pakistani citizens become less concerned with the future and save less at each real interest rate ?
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A. Real interest rates fall and investment falls

B. Real interest rates rise and investment falls

C. Real interest rates rise and investment rises

D. Real interest rates fall and investment rises

15. Credit risk refers to a bonds ?
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A. tax treatment

B. Probability of default

C. Price-earnings ratio

D. dividend

16. Which of the following financial market securities would probably pay the highest interest rate ?
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A. A government bond issued by the government of France.

B. A bond issued by a startup company

C. An investment funds with portfolio of corporate bonds issued by blue chip companies

D. A bond issued by a blue-chip company

17. Which of the following is an example of equity finance ?
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A. Company shares

B. All of these answers are equity finance

C. Government bonds

D. Corporate bonds

18. If GDP = Rs1,000 Consumption = Rs 600 taxes = Rs 100, and government purchases = Rs200, how much is saving and investment ?
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A. Saving = Rs 300 investment = Rs 300

B. Saving = Rs 100 investment = Rs 200

C. Saving = Rs 0 investment = Rs 0

D. Saving = Rs 200 investment = Rs 100

19. An increase in the budget deficit that causes the government to increase its borrowing ?
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A. Shift the supply of loanable funds to the left

B. Shifts the supply of loanable funds to the right

C. Shift the demand for loanable funds to the right

D. Shift the demand for loandbale funds to the left

20. If the government increases investment tax credits and reduces taxes on the return to saving at the same time ?
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A. the real interest rate should rise

B. the impact on the real interest rate is indeterminate

C. the real interest rate should not change

D. the real interest rate should fall