8. Which of the following people purchased the correct asset to meet his or her objective? a. Michelle wanted to be a part owner of Mamma Rosa's Pizza, so she purchased a bond issued by Mamma Rosa's Pizza. b. Tim wanted a high return, even if it meant taking some risk, so he purchased stock issued by Specific Electric instead of bonds issued by Specific Electric c. Jennifer wanted to buy equity in Honda, so she purchased bonds sold by Honda. d. All of the above are correct. ANS: 9. World Wide Delivery Service Corporation develops a way to speed up its deliveries and reduce its costs. We would expect that this would a. raise the demand for existing shares of the stock, causing the price to rise. b. decrease the demand for existing shares of the stock, causing the price to fall. c. raise the supply of the existing shares of stock, causing the price to rise. d. raise the supply of the existing shares of stock, causing the price to fall ANS: 10. Midwestern Corporation issues bonds. Southern corporation issues stock. Which corporation used equity financing? a. both Midwestern corporation and Southern corporation corporation corporation corporation b. Midwestern corporation but not Southern c. Southern corporation but not Midwestern d. neither Midwestern nor Southern ANS: economy, GDP is S11 trillion I1. For a c consumption is $7 trillion, taxes are S3 trillion and the government runs a surplus of S1 trillion. What are private saving and national saving? a. $4 trillion and S1 trillion, respectively b. $4 trillion and S5 trillion, respectively C. $1 trillion and S2 trillion, respectively d. S1 lion and S1 trillion, respectively ANS 12. If the demand for loanable funds shifts to the right, then the equilibrium interest rate and quantity of loanable funds rise and quantity of loanable funds fall. rises and the quantity of loanable funds falls. falls and the quantity of loanable funds rises a. b. c. d. ANS 13. An American company operates a fast food restaurant in Paris, France. Which of the following statements is accurate? The value of the goods and services produced by the restaurant is included in both French GDP and U.S. GDP a. b. The value added by American workers and equipment in France is included in U.S. GDP and the value added by French workers and equipment is GDP The value of the goods and services produced by the restaurant is included in French GDP, but not in U.S. GDP The value of the goods and services produced by the restaurant is included in U.S. GDP, but not in French GDP added to French c. d
