Stocks

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Correct options are highlighted when revealed.

1.What is the effect of an increase in the budget surplus on the market for loanable funds?

Causes the supply of loanable funds to decrease, leading to a higher real interest rate.Causes the supply of loanable funds to increase, resulting in a lower real interest rate.Leads to an increase in the demand for loanable funds, pushing the real interest rate upward.Leads to a decrease in the demand for loanable funds, causing the real interest rate to fall.Has no impact on either supply or demand in the loanable funds market.

2.What happens to real interest rates and investment if Pakistani citizens become less future-oriented and reduce their savings at every real interest rate?

Real interest rates increase while investment decreasesReal interest rates increase and investment also increasesReal interest rates decrease and investment goes upReal interest rates decrease along with investment

3.What effect does a rise in the budget deficit have on public savings?

An increase in government savingsA reduction in private savingsNo impact on savingsA decline in public savings

4.What is the effect of a larger budget deficit on the real interest rate and the demand for loanable funds used for investment?

It increases the real interest rate and reduces the amount of loanable funds sought for investmentIt decreases the real interest rate and raises the demand for loanable funds for investmentIt causes the real interest rate to rise and boosts the demand for loanable funds for investmentIt lowers the real interest rate and diminishes the demand for loanable funds for investment

5.Which combination of government policies is most effective in promoting economic growth?

Reduce taxes on savings returns, offer investment tax credits, and decrease the budget deficitRaise taxes on savings returns, grant investment tax credits, and increase the budget deficitRaise taxes on savings returns, grant investment tax credits, and reduce the budget deficitReduce taxes on savings returns, offer investment tax credits, and increase the budget deficit

6.What does investment primarily refer to?

Buying consumer products and servicesAcquiring capital assets and physical infrastructureDepositing money into a savings accountPurchasing shares and debt securities

7.If the public reduces consumption by Rs 100 billion while the government increases its spending by Rs 100 billion, assuming all other factors remain constant, which statement is correct?

Saving remains the sameSaving rises, leading to faster economic growthSaving declines, resulting in slower economic growthInsufficient data to conclude the impact on savingNone of the above

8.What occurs when government expenditures surpass the revenue collected from taxes?

A budget deficit arisesNo correct answer listedA budget surplus is createdPrivate savings increase

9.What does national saving represent in economic terms?

No correct answer listedThe sum of investment and consumer spendingThe total of private saving plus government savingGross Domestic Product minus government expenditures

10.What does credit risk indicate in relation to a bond?

Chance that the issuer will fail to repayRatio of price to earningsPeriodic payment to shareholdersTax implications of the bond