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Final

ECON 1010 Study Guide - Final Guide: Association To Advance Collegiate Schools Of Business, Pearson Education, Financial InstitutionExam


Department
Economics
Course Code
ECON 1010
Professor
Edward Haltrecht
Study Guide
Final

This preview shows pages 1-3. to view the full 54 pages of the document.
Parkin/Bade, Economics: Canada in the Global Environment, 8e
Copyright © 2013 Pearson Canada Inc. 901
Chapter 23 Finance, Saving, and Investment
23.1 Financial Institutions and Financial Markets
1) Capital is
A) the tools, instruments, machines, buildings, and other items that have been produced in the
past and that are used today to produce goods and services.
B) financial wealth.
C) the sum of investment and government expenditure on goods.
D) net investment.
E) gross investment.
Answer: A
Type: MC
Topic: Financial Institutions and Financial Markets
Skill: Recognition
AACSB: Reflective Thinking
2) Gross investment
A) is the total amount spent on new capital.
B) includes only replacement investment.
C) equals wealth minus saving.
D) equals saving minus wealth.
E) is the change in the value of capital
Answer: A
Type: MC
Topic: Financial Institutions and Financial Markets
Skill: Recognitiong
AACSB: Reflective Thinking
3) The total amount spent on new capital is
A) wealth.
B) gross investment.
C) depreciation.
D) net investment.
E) saving.
Answer: B
Type: MC
Topic: Financial Institutions and Financial Markets
Skill: Recognition
AACSB: Reflective Thinking

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Parkin/Bade, Economics: Canada in the Global Environment, 8e
Copyright © 2013 Pearson Canada Inc. 902
4) In January 2011, Tim's Gyms, Inc. owned machines valued at $1 million. During the year, the
market value of the machines fell by 30 percent. During 2011, Tim spent $200,000 on new
machines. During 2011, Tim's gross investment was
A) $1 million.
B) $300,000.
C) $200,000
D) $900,000.
E) $100,000.
Answer: C
Diff: 1 Type: MC
Topic: Financial Institutions and Financial Markets
Skill: Analytical
AACSB: Analytical Skills
5) Net investment equals
A) capital minus depreciation.
B) gross investment minus depreciation.
C) the total quantity of plant, equipment, and buildings.
D) gross investment/depreciation.
E) wealth minus saving.
Answer: B
Type: MC
Topic: Financial Institutions and Financial Markets
Skill: Recognition
AACSB: Reflective Thinking
6) The increase in the value of capital is
A) gross investment.
B) depreciation.
C) net investment.
D) private sector spending.
E) wealth.
Answer: C
Type: MC
Topic: Financial Institutions and Financial Markets
Skill: Recognition
AACSB: Reflective Thinking

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Parkin/Bade, Economics: Canada in the Global Environment, 8e
Copyright © 2013 Pearson Canada Inc. 903
7) Capital stock increases when
A) gross investment exceeds net investment.
B) net investment exceeds gross investment.
C) gross investment is negative.
D) net investment is positive.
E) net investment is zero.
Answer: D
Type: MC
Topic: Financial Institutions and Financial Markets
Skill: Conceptual
AACSB: Reflective Thinking
8) If the economy's capital increases over time,
A) net investment is positive.
B) depreciation is less than zero.
C) depreciation exceeds gross investment.
D) gross investment equals depreciation.
E) gross investment is zero.
Answer: A
Type: MC
Topic: Financial Institutions and Financial Markets
Skill: Conceptual
AACSB: Reflective Thinking
9) If the economy's capital decreases over time,
A) net investment is positive.
B) depreciation is less than zero.
C) depreciation exceeds gross investment.
D) gross investment equals net investment.
E) gross investment is zero.
Answer: C
Type: MC
Topic: Financial Institutions and Financial Markets
Skill: Conceptual
AACSB: Reflective Thinking
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