ECO 2305 TTU QUESTION BANK 2026
ECONOMIC PRINCIPLES REVIEW UPDATED
A+
◉ suppose the economy is closed with national savings of $3 trillion,
consumption of $10 trillion and government purchases of $4 trillion
- what is GDP
Answer: $17 trillion
◉ what is a certificate of indebtedness
Answer: bonds but not stocks
◉ suppose that in a closed economy GDP is equal to $15000,
government purchases are equal to $3000, consumption equals
$10500, and taxes equal 3500 - what are private savings and public
savings
Answer: 1000 and 500 respectively
◉ a mutual fund is
Answer: an institution that sells shares to the public and uses the
proceeds to buy a selection of various types of stocks, bonds, or both
stocks and bonds
, ◉ in a closed economy, what remains after paying for consumption
and government purchases is
Answer: national savings
◉ a bond that never matures is known as a
Answer: perpetuity
◉ banks
Answer: play a role in creating an asset that people can use as a
medium of exchange
◉ what is included in M1 and M2
Answer: currency, demand deposits, and other checkable deposits
◉ fiat money
Answer: has no intrinsic value
◉ what is included in M2 but not in M1
Answer: savings deposits
◉ reserve requirements are regulations concerning
Answer: the amount of reserves banks must hold against deposits
ECONOMIC PRINCIPLES REVIEW UPDATED
A+
◉ suppose the economy is closed with national savings of $3 trillion,
consumption of $10 trillion and government purchases of $4 trillion
- what is GDP
Answer: $17 trillion
◉ what is a certificate of indebtedness
Answer: bonds but not stocks
◉ suppose that in a closed economy GDP is equal to $15000,
government purchases are equal to $3000, consumption equals
$10500, and taxes equal 3500 - what are private savings and public
savings
Answer: 1000 and 500 respectively
◉ a mutual fund is
Answer: an institution that sells shares to the public and uses the
proceeds to buy a selection of various types of stocks, bonds, or both
stocks and bonds
, ◉ in a closed economy, what remains after paying for consumption
and government purchases is
Answer: national savings
◉ a bond that never matures is known as a
Answer: perpetuity
◉ banks
Answer: play a role in creating an asset that people can use as a
medium of exchange
◉ what is included in M1 and M2
Answer: currency, demand deposits, and other checkable deposits
◉ fiat money
Answer: has no intrinsic value
◉ what is included in M2 but not in M1
Answer: savings deposits
◉ reserve requirements are regulations concerning
Answer: the amount of reserves banks must hold against deposits
