FINAL EXAM MODULE 22 FINAL STUDY
GUIDE 2026 QUESTIONS WITH ANSWERS
GRADED A+
⫸ Physical Capital Answer: One of the two sources of instrumental
economic growth; increases in capital - goods used to make other goods.
Is mainly created through private investment spending.
⫸ Interest Rate Answer: The price, calculated as a percentage of the
amount borrowed, charged by lenders to borrowers for the use of their
savings for one year.
⫸ Savings-Investment Spending Identity Answer: Savings are
investment spending are always equal for the economy as a whole
⫸ Budget Surplus Answer: If government collects more tax revenue
than it spends
⫸ Budget Deficit Answer: Government spending exceeds tax revenue; a
negative budget surplus
⫸ Budget Balence Answer: The difference between tax revenue and
government spending; refers to both a budget surplus and a budget
deficit
, ⫸ National Savings Answer: equal to the sum of private savings and the
budget balance; the total amount of savings generated within the
economy
⫸ Capital Inflow Answer: The net effect of international inflows and
outflows of funds on the total savings available for investment spending
in any given country. Is equal to the total inflow of foreign funds minus
the total outflow of domestic funds to other countries.
⫸ Inflow Answer: Foreign savings that finance investment spending in
the country
⫸ Outflows Answer: Domestic savings that finance investment
spending in another country
⫸ National Cost Answer: The interest that must eventually be paid to
the foreigner
⫸ Wealth Answer: A household's value of its accumulated savings
⫸ Financial Asset Answer: A paper claim that entitles the buyer to
future income from the seller
⫸ Physical Asset Answer: A claim on a tangible object that gives the
owner the right to dispose of the object as he or she wishes
GUIDE 2026 QUESTIONS WITH ANSWERS
GRADED A+
⫸ Physical Capital Answer: One of the two sources of instrumental
economic growth; increases in capital - goods used to make other goods.
Is mainly created through private investment spending.
⫸ Interest Rate Answer: The price, calculated as a percentage of the
amount borrowed, charged by lenders to borrowers for the use of their
savings for one year.
⫸ Savings-Investment Spending Identity Answer: Savings are
investment spending are always equal for the economy as a whole
⫸ Budget Surplus Answer: If government collects more tax revenue
than it spends
⫸ Budget Deficit Answer: Government spending exceeds tax revenue; a
negative budget surplus
⫸ Budget Balence Answer: The difference between tax revenue and
government spending; refers to both a budget surplus and a budget
deficit
, ⫸ National Savings Answer: equal to the sum of private savings and the
budget balance; the total amount of savings generated within the
economy
⫸ Capital Inflow Answer: The net effect of international inflows and
outflows of funds on the total savings available for investment spending
in any given country. Is equal to the total inflow of foreign funds minus
the total outflow of domestic funds to other countries.
⫸ Inflow Answer: Foreign savings that finance investment spending in
the country
⫸ Outflows Answer: Domestic savings that finance investment
spending in another country
⫸ National Cost Answer: The interest that must eventually be paid to
the foreigner
⫸ Wealth Answer: A household's value of its accumulated savings
⫸ Financial Asset Answer: A paper claim that entitles the buyer to
future income from the seller
⫸ Physical Asset Answer: A claim on a tangible object that gives the
owner the right to dispose of the object as he or she wishes
