ECON 201 week 7 American Military University 2025
COMPREHENSIVE EXAM QUESTIONS WITH DETAILED
VERIFIED AND 100% CORRECT ANSWERS multiple
choices |ALREADY GRADED A+!!ECON201 WEEK 7
physical capital - (ANSWER)machines, tools, buildings, computer systems and
other items that have been produced in the past and that are used today to
produce goods and services
financial capital - (ANSWER)the funds that firms use to buy physical capital:
LOANS, STOCKS, BONDS--these are called financial instruments
gross investment - (ANSWER)the total amount spent on purchases of new
physical capital and on replacing depreciated capital
stock vs. flow eamples - (ANSWER)stocks: a persons wealth, balance on your
credit card, the gov't debt
flow: a person's annual saving, dollars added to your credit card this month, the
govt deficit
wealth - (ANSWER)the value of all the things that people own--it is a stock
saving - (ANSWER)is the amount of income that is not paid in taxes or spent on
consumption goods and services--it is a flow
, Three types of financial markets - (ANSWER)loan markets
bond markets
stock markets
interest rates and assent prices are _________ related. - (ANSWER)inversely. So,
if the asset price gets bigger, interest rate gets smaller. If asset price is smaller,
interest rate is bigger.
Investment equation: I= - (ANSWER)I=S+ (T-G) + (M-X)
nominal interest rate
For example, if the annual interest paid on a $50 loan is $5, the nominal interest
rate is ______% per year. - (ANSWER)number of dollars that a borrower pays and
a lender receives in interest in a year expressed as a percentage of the number of
dollars borrowed and lent.
10%
real interest rate
For example, if the nominal interest rate is 5 percent a year and the inflation rate
is 2 percent a year, the real interest rate is ______% a year. - (ANSWER)nominal
interest rate adjusted to remove the effects of inflation on the buying power of
money.
[= nominal interest rate - inflation]
3%
COMPREHENSIVE EXAM QUESTIONS WITH DETAILED
VERIFIED AND 100% CORRECT ANSWERS multiple
choices |ALREADY GRADED A+!!ECON201 WEEK 7
physical capital - (ANSWER)machines, tools, buildings, computer systems and
other items that have been produced in the past and that are used today to
produce goods and services
financial capital - (ANSWER)the funds that firms use to buy physical capital:
LOANS, STOCKS, BONDS--these are called financial instruments
gross investment - (ANSWER)the total amount spent on purchases of new
physical capital and on replacing depreciated capital
stock vs. flow eamples - (ANSWER)stocks: a persons wealth, balance on your
credit card, the gov't debt
flow: a person's annual saving, dollars added to your credit card this month, the
govt deficit
wealth - (ANSWER)the value of all the things that people own--it is a stock
saving - (ANSWER)is the amount of income that is not paid in taxes or spent on
consumption goods and services--it is a flow
, Three types of financial markets - (ANSWER)loan markets
bond markets
stock markets
interest rates and assent prices are _________ related. - (ANSWER)inversely. So,
if the asset price gets bigger, interest rate gets smaller. If asset price is smaller,
interest rate is bigger.
Investment equation: I= - (ANSWER)I=S+ (T-G) + (M-X)
nominal interest rate
For example, if the annual interest paid on a $50 loan is $5, the nominal interest
rate is ______% per year. - (ANSWER)number of dollars that a borrower pays and
a lender receives in interest in a year expressed as a percentage of the number of
dollars borrowed and lent.
10%
real interest rate
For example, if the nominal interest rate is 5 percent a year and the inflation rate
is 2 percent a year, the real interest rate is ______% a year. - (ANSWER)nominal
interest rate adjusted to remove the effects of inflation on the buying power of
money.
[= nominal interest rate - inflation]
3%
