Which of the following may constitute the International Monetary Fund’s conditionality for borrowing?

I. Government reducing budget deficts
Ii. limiting credit creation and liberalizing trade
Iii. achieving market-clearing price
Iv. restraining public sector employment and wage rates

Which of the following sets of government policies is the most growth oriented ?

A. Lower taxes on the returns to saving, provide investment tax credits and lower the deficit
B. Increase tax on the returns to saving provide investment tax credits and increase the deficit
C. Increase tax on the returns to saving provide investment tax credits and lower the deficit
D. Lower taxes on the returns to saving provide investment tax credits and increase the deficit

An increase in the budget deficit will ?

A. Raise the real interest rate and decrease the quantity of loanable funds demanded for investment
B. Lower the real interest rate and increase the quantity of loaable funds demanded for investment
C. Raise the real interest rate and increase the quantity of loandable funds demanded for investment
D. Lower the real interest rate and decrease the quantity of loanable funds demanded for investment

An increase in the budget deficit is ?

A. An increase in public saving
B. A decrease in private saving
C. None of these answers
D. A decrease in public savings

If the public consumes Rs 100 billion less and the government purchases Rs100 billion more (other things unchanging), Which of the following statement is true ?

A. Saving is unchanged
B. There is an increased in saving and the economy should grow more quickly
C. There is a decrease in saving and the economy should grow more slowly
D. There is not enough information to determine what will happen to saving

National Saving (or just saving) is equal to ?

A. None of these answers
B. Investment + consumption expenditures
C. Private saving + public saving
D. Gdp government purchases

If government spending exceeds tax collections?

A. There is a budget deficit
B. None of these answers
C. There is a budget surplus
D. Private saving is positive

If the Supply of loanable funds is very inelastic (steep) Which policy would likely increase saving and investment the most ?

A. A reduction in the budget deficit
B. An increase in the budget deficit
C. An investment tax credit
D. None of the above

If an increase in the budget deficit reduces national saving and investment we have witnessed a demonstration of ?

A. Intermediation
B. Equity finance
C. Crowding out
D. The investment fund effect

If the government increases investment tax credits and reduces taxes on the return to saving at the same time ?

A. The real interest rate should fall
B. The real interest rate should rise
C. The impact on the real interest rate is indeterminate
D. The real interest rate should not change