5.01 Economic Trends
Which are used in the calculation of the gross domestic product?
A. land titles
B. net exports
C. projected expenses
D. intermediate goods
B. net exports
In calculating GDP, economists try to avoid double counting because it would:
A. cause legal problems.
B. inflate the value of GDP.
C. lower the standard of living.
D. increase the price of products.
B. inflate the value of GDP.
Japan and the U.S. buy and sell each other’s goods and services. This is an example of:
A. exporting.
B. importing.
C. global trade.
D. domestic trade.
C. global trade.
How can the general state of the economy affect a stock's price?
A. by increasing supply or demand
B. by filtering out poor investments
C. by bringing together a balanced portfolio
D. by making investment information available to the public
A. by increasing supply or demand
What often occurs when the national unemployment rate falls?
A. Tariffs decrease.
B. Stock trades stabilize.
C. The inflation rate increases.
D. The demand for money decreases.
C. The inflation rate increases.
Interest rates that rise and fall by a wide range on a regular basis often are an indication of:
A. seasonal unemployment.
B. economic instability.
C. price equilibrium.
D. flexible capital.
B. economic instability.
Gross domestic product that has been adjusted for inflation is known as:
A. real GDP.
B. capital goods.
C. GDP per capita.
D. aggregate demand.
A. real GDP.
The U.S. produces widgets faster and more cheaply than Switzerland does. In this example, the U.S. has which type of economic advantage?
A. absolute
B. comparative
C. constructive
D. predictable
A. absolute
What type of order restriction lets a broker know the order will expire at the end of the trading day?
A. day order
B. all or none
C. fill or kill order
D. good 'til canceled
A. day order
A decline in the financial markets can be caused by:
A. lower inflation.
B. higher employment.
C. higher unemployment.
D. growth in major industry sectors.
C. higher unemployment.
Businesses purchasing items for resale are exempt from sales tax. This helps to prevent what problem when measuring the GDP?
A. double counting
B. recording bartering
C. underground economy
D. secondhand transactions
A. double counting
The period of time during the business cycle when production and employment increase is called a/an:
A. contraction.
B. expansion.
C. peak.
D. trough.
B. expansion.
What cultural and social characteristic could affect businesses that trade with certain foreign countries?
A. role of women
B. type of climate
C. source of income
D. variety of industry
A. role of women
Which is a company-specific influence on a stock price?
A. change in supply or demand
B. change in management
C. government action
D. investor activity
B. change in management
Falling interest rates typically cause:
A. no change in stock prices.
B. stock prices to decrease.
C. a stock market to crash.
D. stock prices to increase.
D. stock prices to increase.
Which is an economic condition that consumer spending usually measures?
A. competition
B. depreciation
C. employment
D. infrastructure
C. employment
When an emerging market suffers an economic decline, foreign investors usually:
A. help the emerging market to recover economically.
B. pay less for each transaction in the emerging market.
C. quickly withdraw their money from the emerging market.
D. use the opportunity to invest more in the emerging market.
C. quickly withdraw their money from the emerging market.
A country can often produce goods more inexpensively than other nations because it:
A. places limits on its imports.
B. has easy access to raw materials.
C. lacks any imposed tariffs and quotas.
D. possesses a very high standard of living.
B. has easy access to raw materials.
How does a bull market affect a stock's price?
A. by avoiding investment scams
B. by encouraging product purchases
C. by discouraging product purchases
D. by promoting well-performing funds
B. by encouraging product purchases
If a small country exported a total of $1,000,000 of goods and services for one year, and imported $500,000 of goods and services during the same year, the country's trade position could best be described as a:
A. trade deficit.
B. trade surplus.
C. balance of trade.
D. balance of payments.
B. trade surplus.
During periods of economic expansion, businesses are likely to:
A. reduce their profits.
B. stop hiring workers.
C. increase their production.
D. benefit from rates.
C. increase their production.
One factor that has stimulated financial globalization is the increase in:
A. protectionism.
B. foreign regulation.
C. domestic competition.
D. investment preferences.
C. domestic competition.
Which is an example of nonverbal communication that might have a different meaning to businesspeople in other parts of the world?
A. shaking hands when greeting a customer
B. inviting customers to a social function
C. preparing an audiovisual presentation
D. writing letters in a foreign language
A. shaking hands when greeting a customer
Stocks whose prices rise higher, or fall lower, than the market as a whole are referred to as:
A. efficient.
B. influential.
C. successful.
D. volatile.
D. volatile.
4.05 Insurance Careers:
An insurance appraiser:
A. determines repair costs for insurance claim settlements.
B. processes applications for insurance policies and any requested changes to these policies.
C. reviews individual applications for insurance to evaluate the degree of risk involved and determine the acceptance of applications.
D. reviews settled insurance claims to determine that payments and settlements have been made in accordance with company practices and procedures.
A. determines repair costs for insurance claim settlements.