Question 1

If wages grew 3.15% in 2019, but inflation was 2.75%, what was the approximate real increase in wages?

Accepted Answer

A) .10% 
B) .20% 
C) .30% 
D) .40% 
E) .50% 
A) .10% 
B) .20% 
C) .30% 
D) .40% 
E) .50%

Question 2

Suppose you are a U.S. investor who is planning to invest $100,000 in China. Your Chinese investment gains 5%. If the exchange rate moves from 7.12 Yuan per dollar to 7.14 Yuan per dollar over the period, what is your total return on this investment?

Accepted Answer

A) 4.42% 
B) 4.56% 
C) 4.71% 
D) 5.26% 
E) 5.33% 
A) 4.42% 
B) 4.56% 
C) 4.71% 
D) 5.26% 
E) 5.33%

Question 3

Suppose you want to convert U.S. dollars to Indian rupees. If you have $120,000 and the exchange rate is $.0159 per rupee, how many rupees (in millions)will you receive in the conversion?

Accepted Answer

A) 6.28 million 
B) 6.67 million 
C) 7.12 million 
D) 7.55 million 
E) 7.88 million 
A) 6.28 million 
B) 6.67 million 
C) 7.12 million 
D) 7.55 million 
E) 7.88 million

Question 4

If the nominal GDP was reported at $211.3 billion and real GDP was reported at $207.7 billion, what was the inflation rate for the period?

Accepted Answer

A) 1.64% 
B) 1.73% 
C) 1.93% 
D) 2.27% 
E) 2.46% 
A) 1.64% 
B) 1.73% 
C) 1.93% 
D) 2.27% 
E) 2.46%

Question 5

An analyst gathered the following year-end price level data for an economy. What is the economy's annual compounded inflation rate for 2014-2019?
$$\begin{array} { l l } 
2014 & 174.0 \
2018 & 190.3 \
2019 & 196.8
\end{array}$$

Accepted Answer

A) 2.22% 
B) 2.49% 
C) 2.68% 
D) 2.87% 
E) 2.92% 
A) 2.22% 
B) 2.49% 
C) 2.68% 
D) 2.87% 
E) 2.92%

Question 6

Assume that the Federal Reserve injects $3.93 billion into the financial system. If the reserve requirement is 11%, what is the maximum increase in money supply (in billions)that may result?

Accepted Answer

A) $33.00 
B) $34.74 
C) $35.39 
D) $35.73 
E) $36.60 
A) $33.00 
B) $34.74 
C) $35.39 
D) $35.73 
E) $36.60

Question 7

Assume the inflation rate in 2020 is 2.1%. If the nominal GDP grew 4.6% and nominal wages grew 2.4%, what are the approximate real growth rates of GDP and wages?

Accepted Answer

A) 2.0%; .8% 
B) 2.0%; .9% 
C) 2.2%; .3% 
D) 2.5%; .3% 
E) 2.5%; .6% 
A) 2.0%; .8% 
B) 2.0%; .9% 
C) 2.2%; .3% 
D) 2.5%; .3% 
E) 2.5%; .6%

Question 8

You invest $250,000 in Japan at a starting exchange rate of 101.50¥/$. Your Japanese investment gains 5.6%, and the ending exchange rate is 102.40¥/$. What is your total return on this investment?

Accepted Answer

A) 3.91% 
B) 4.13% 
C) 4.67% 
D) 4.82% 
E) 5.08% 
A) 3.91% 
B) 4.13% 
C) 4.67% 
D) 4.82% 
E) 5.08%

Question 9

"PIGS" refers to which 4 countries in Europe?

Accepted Answer

A) Portugal, Ireland, Greece, and Spain 
B) Portugal, Ireland, Germany, and Switzerland 
C) Poland, Ireland, Germany, and Sweden 
D) Poland, Italy, Greece, and Spain 
E) Poland, Italy, Greece, and Slovenia 
A) Portugal, Ireland, Greece, and Spain 
B) Portugal, Ireland, Germany, and Switzerland 
C) Poland, Ireland, Germany, and Sweden 
D) Poland, Italy, Greece, and Spain 
E) Poland, Italy, Greece, and Slovenia

Question 10

The interest rate the Federal Reserve charges its member banks on loans is called the:

Accepted Answer

A) fed funds rate. 
B) Federal Reserve rate. 
C) discount rate. 
D) federal loan rate. 
E) reserve loan rate. 
A) fed funds rate. 
B) Federal Reserve rate. 
C) discount rate. 
D) federal loan rate. 
E) reserve loan rate.

Question 11

The short-term rate at which banks lend to each other is called the ________.

Accepted Answer

A) fed funds rate 
B) Federal Reserve rate 
C) discount rate 
D) federal loan rate 
E) reserve loan rate 
A) fed funds rate 
B) Federal Reserve rate 
C) discount rate 
D) federal loan rate 
E) reserve loan rate

Question 12

If the nominal GDP was reported at $222.1 billion and real GDP was reported at $218.2 billion, what was the inflation rate for the period?

Accepted Answer

A) 1.50% 
B) 1.72% 
C) 1.79% 
D) 2.02% 
E) 2.28% 
A) 1.50% 
B) 1.72% 
C) 1.79% 
D) 2.02% 
E) 2.28%

Question 13

The power of a "rippling effect" of adding money to the financial system is measured by the ________.

Accepted Answer

A) ripple ratio 
B) money multiplier 
C) multiplier ratio 
D) money magnifier 
E) magnifier ratio 
A) ripple ratio 
B) money multiplier 
C) multiplier ratio 
D) money magnifier 
E) magnifier ratio

Question 14

The buying and selling of bonds by the Federal Reserve to manage the money supply is called ________.

Accepted Answer

A) quantitative easing 
B) discount window operations 
C) open market operations 
D) money supply management 
E) Federal Reserve operations 
A) quantitative easing 
B) discount window operations 
C) open market operations 
D) money supply management 
E) Federal Reserve operations

Question 15

It has been estimated that "substitution effects" underestimate the Consumer Price Index by approximately how much?

Accepted Answer

A) 3% 
B) 2.5% 
C) 1.75% 
D) 1.0% 
E) .5% 
A) 3% 
B) 2.5% 
C) 1.75% 
D) 1.0% 
E) .5%

Question 16

Which type of economic sectors has a low sensitivity to the business cycle?

Accepted Answer

A) defensive 
B) offensive 
C) lagging 
D) cyclical 
E) leading 
A) defensive 
B) offensive 
C) lagging 
D) cyclical 
E) leading

Question 17

Which type of economic sectors has a high sensitivity to the business cycle?

Accepted Answer

A) defensive 
B) offensive 
C) lagging 
D) cyclical 
E) leading 
A) defensive 
B) offensive 
C) lagging 
D) cyclical 
E) leading

Question 18

Which of the following reflects the dollar value of economic output in terms of the current year?

Accepted Answer

A) current year GDP 
B) real GDP 
C) nominal GDP 
D) adjusted GDP 
E) actual GDP 
A) current year GDP 
B) real GDP 
C) nominal GDP 
D) adjusted GDP 
E) actual GDP

Question 19

The CPI for this year was reported as 164.9. If inflation was 1.25%, what must the CPI have been last year?

Accepted Answer

A) 161.21 
B) 161.63 
C) 162.47 
D) 162.65 
E) 162.86 
A) 161.21 
B) 161.63 
C) 162.47 
D) 162.65 
E) 162.86

Question 20

Which one of the following is defined as the market value of goods and services produced over a period of time?

Accepted Answer

A) Domestic Market Product (DMP) 
B) Gross Domestic Product (GDP) 
C) Gross Economic Activity (GE
A)  
D) Gross Market Value (GMV) 
E) Market Value Product (MVP) 
A) Domestic Market Product (DMP) 
B) Gross Domestic Product (GDP) 
C) Gross Economic Activity (GE
A)  
D) Gross Market Value (GMV) 
E) Market Value Product (MVP)

Exam 20: Global Economic Activity and Industry Analysis

If wages grew 3.15% in 2019, but inflation was 2.75%, what was the approximate real increase in wages?

Suppose you are a U.S. investor who is planning to invest $100,000 in China. Your Chinese investment gains 5%. If the exchange rate moves from 7.12 Yuan per dollar to 7.14 Yuan per dollar over the period, what is your total return on this investment?

Suppose you want to convert U.S. dollars to Indian rupees. If you have $120,000 and the exchange rate is $.0159 per rupee, how many rupees (in millions)will you receive in the conversion?

If the nominal GDP was reported at $211.3 billion and real GDP was reported at $207.7 billion, what was the inflation rate for the period?

An analyst gathered the following year-end price level data for an economy. What is the economy's annual compounded inflation rate for 2014-2019? 2014 174.0 2018 190.3 2019 196.8

Assume that the Federal Reserve injects $3.93 billion into the financial system. If the reserve requirement is 11%, what is the maximum increase in money supply (in billions)that may result?

Assume the inflation rate in 2020 is 2.1%. If the nominal GDP grew 4.6% and nominal wages grew 2.4%, what are the approximate real growth rates of GDP and wages?

You invest $250,000 in Japan at a starting exchange rate of 101.50¥/$. Your Japanese investment gains 5.6%, and the ending exchange rate is 102.40¥/$. What is your total return on this investment?

"PIGS" refers to which 4 countries in Europe?

The interest rate the Federal Reserve charges its member banks on loans is called the:

The short-term rate at which banks lend to each other is called the ________.

If the nominal GDP was reported at $222.1 billion and real GDP was reported at $218.2 billion, what was the inflation rate for the period?

The power of a "rippling effect" of adding money to the financial system is measured by the ________.

The buying and selling of bonds by the Federal Reserve to manage the money supply is called ________.

It has been estimated that "substitution effects" underestimate the Consumer Price Index by approximately how much?

Which type of economic sectors has a low sensitivity to the business cycle?

Which type of economic sectors has a high sensitivity to the business cycle?

Which of the following reflects the dollar value of economic output in terms of the current year?

The CPI for this year was reported as 164.9. If inflation was 1.25%, what must the CPI have been last year?

Which one of the following is defined as the market value of goods and services produced over a period of time?

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