Exam 12: Macroeconomic and Industry Analysis

Firm A produces gadgets. The price of gadgets is $2 each. Firm A has total fixed costs of $1,000,000 and variable costs of $1 per gadget. The corporate tax rate is 40%. If the economy is strong, the firm will sell 2,000,000 gadgets. If the economy enters a recession, the firm will sell only half as many gadgets. If the economy enters a recession, the after-tax profit of firm A will be ________.

In macroeconomic terms, an increase in the price of imported oil or a decrease in the availability of oil is an example of a ________.

Stock prices tend to ________ when corporate earnings ________.

Which of the following would not be considered a supply shock?

Which of the following describes the percentage of the total labor force that has yet to find work?

The federal government decides to pay for the transition to private social security accounts with a one-time $1 trillion bond issue. What will be the biggest concern to businesses relative to the "crowding out" effect?

Stock prices are ________ measures of firm value.

The ratio of the purchasing power of two economies is termed the ________.

During 2004 China increased its use of global oil by 40%. This followed a 100% increase during the previous 5 years. How do economists refer to this kind of economic event?

An example of a highly cyclical industry is the ________.

Items that are ________ and product purchases for which ________ is not important tend to be less cyclical in nature.

If interest rates increase, business investment expenditures are likely to ________ and consumer durable expenditures are likely to ________.

Which of the following is the rate at which the general level of prices for goods and services is rising?