ch13 - Chapter 13 ECONOMY/MARKET ANALYSIS Multiple Choice...

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Chapter 13 ECONOMY/MARKET ANALYSIS Multiple Choice Questions Taking a Global Perspective 1. The general trend worldwide is to: a. close economies and deregulate industries. b. limit economies and regulate industries. c. open economies and deregulate industries. d. There is no general trend worldwide. (c, easy) 2. By 2002, the euro: a. fell against the dollar. b. replaced the dollar as the most important currency. c. gained significantly against the dollar. d. was replaced by the British pound. (c, easy) Assessing the Economy 3. The beginning and ending of a business cycle is also known as a: a. cycle. b. trough. c. peak. d. contraction. (b, easy) 4. On average, contractions since World War II last: a. slightly less than 6 months. b. slightly less than one year. c. slightly less than 18 months. d. slightly less than two years. (b, moderate) Chapter Thirteen Economy/Market Analysis 163
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5. The National Bureau of Economic Research is: a. a division of the Department of Commerce. b. the largest association of professional economic forecasters. c. a private nonprofit organization. d. a division of the Federal Reserve. (c, moderate) 6. Which of the following is not one of the components of GDP? a. investment spending b. government spending c. net exports d. financial transactions (d, moderate) 7. The largest component of GDP is: a. consumption b. government spending c. net exports d. investment spending (a, easy) 8. Indexes of general economic activity are considered all except: a. lagging b. emerging c. leading d. coincident (b, moderate) 9. Which of the following is considered a lagging indicator? a. duration of unemployment b. stock prices c. money supply d. interest rate spread (c, moderate) Chapter Thirteen Economy/Market Analysis 164
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The federal agency most involved with the money supply and interest rates is a. the Treasury Department b. the Federal Reserve c. the Department of Commerce d. the U. S. Mint (b, easy) 11. Which of the following statements concerning the stock market and the economy is true? a. The stock market generally leads the economy. b. The stock market generally follows the economy. c. The stock market has an inverse relationship with the economy. d. The stock market has little relationship with the economy. (a, moderate) 12. One explanation for stock prices leading the economy involves: a. a political change, such as a change in administration. b. investors switching from domestic to international stocks. c. an investor change in the required return. d. insider trading based on nonpublic information. (c, difficult) 13. When speculation pushes asset prices to unsustainable highs, this is known as a: a. crash. b. contraction. c. recession. d.
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ch13 - Chapter 13 ECONOMY/MARKET ANALYSIS Multiple Choice...

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