1) Our economic system produces ________ goods that firms use as inputs to produ
ID: 1114385 • Letter: 1
Question
1) Our economic system produces ________ goods that firms use as inputs to produce future goods and services.
A) investment
B) capital
C) tangible
D) depreciation
2) In which of the following examples does the firm acquire financial capital from households through a financial intermediary?
A) A firm sells a bond to John Doe.
B) The firm sells a bond to an employee pension fund.
C) The firm uses retained earnings to purchase shares of its stocks owned by individuals.
D) The firm uses retained earnings to purchase shares of its stock owned by a mutual fund company.
3) As the inventory of a firm rises,
A) there is no change in its capital.
B) its intangible capital increases.
C) its tangible capital increases.
D) its social capital decreases.
4) Firms that offer to pay for professional development for their employees are investing in ________ capital.
A) human
B) productive
C) social
D) None of the above is correct.
5) The measure of a firm's capital stock is the ________ its plant, equipment, inventories, and intangible assets.
A) value it paid for
B) depreciable value of
C) current market value of
D) quantity of
6) Capital goods yield benefits
A) as soon as the investment decision is made.
B) before they are put to use.
C) over their life spans.
D) in the present only.
7) Economists use the term ________ to refer to the creation of new capital.
A) investment
B) entrepreneurship
C) depreciation
D) finance
8) We would NOT consider ________ an act of capital investment.
A) a son paying for his mother to go back to college
B) a company purchasing solar panels for its headquarters
C) a city government building a new fire station
D) FedEx delivering a package
9) A country’s plan to spend more than 8 billion dollars U.S. to improve its road network is best described as an example of investment in
A) intangible capital.
B) human capital.
C) infrastructure.
D) tangible capital.
10) Related to the Economics in Practice on page 228: In 2010, Tesla Motors decided to become a public company by offering shares of stock to the public on a stock exchange. The process of doing this is called
A) a stock split.
B) capital gains.
C) an intangible capital investment.
D) an initial public offering.
11) In the ________ market, households supply their savings to firms that demand funds in order to buy capital goods.
A) money
B) savings
C) investment
D) capital
12) Households receive ________ when they lend money directly to firms.
A) shares of stock
B) certificates of investment
C) bonds
D) dividends
13) Which of the following are examples of institutions that economists would classify as belonging to the financial capital market?
A) the stock market
B) banks
C) savings and loans
D) all of the above
14) Firms' ability to invest in capital is limited by households'
A) investment in stock.
B) savings decisions.
C) supply of land.
D) All of the above are correct.
15) As a holder of ________, you are entitled to a portion of the issuing party's profits.
A) a corporate bond
B) a share of common stock
C) a government bond
D) a bank loan
16) When you use your own savings to start a business, you make a profit only after you cover the ________ to start your business.
A) total amount of savings used
B) initial start-up costs
C) opportunity cost of using your savings
D) first-year's total costs
17) Boeing decides to build a new plant using retained earnings; then
A) Boeing's tangible capital will increase as a result.
B) Boeing is engaging in saving on behalf of its shareholders.
C) Boeing's capital stock increases as a result of this investment.
D) All of the above are correct.
18) Related to the Economics in Practice on page 233: In the United States, more mature companies often have a larger percentage of stock held by ________ than do newer companies, and newer companies often have a larger percentage of stock held by ________ than do more mature companies.
A) institutions; insiders
B) foreign governments; institutions
C) insiders; foreign governments
D) the U.S. government; foreign governments
19) When making the decision to invest, the evaluation of the expected flow of future productive services that the investment project will yield is an important consideration. This statement is accurate for firms
A) but not for governments and households.
B) and governments, but not for households.
C) and households, but not for governments.
D) and households and governments.
20) Suppose that a national election occurs that generates a feeling of certainty in the market. It is likely that this incident will ________ the level of investment spending.
A) decrease
B) increase
C) neutralize
D) not affect
Explanation / Answer
Answering the first question as per Chegg policy
1) A) investment goods
The economic system strives to produce investment goods that act as building blocks of the required input for the production of other valuable products .
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