5.01 Economic Trends
High levels of inflation often have a negative effect on a business's:
A. credit rating.
B. import quota.
C. purchasing power.
D. secondary market.
C. purchasing power.
What do bond yields typically do during an economic expansion?
A. increase
B. drop to near zero
C. gradually decrease
D. remain unchanged
A. increase
Which economic advantage occurs when a country can produce goods at a relatively more efficient rate than another country?
A. trade deficit
B. trade surplus
C. absolute advantage
D. comparative advantage
D. comparative advantage
Maggie wants to buy stock in PepsiCo but only when the price drops to a certain amount. What kind of order will she place?
A. limit
B. market
C. stop
D. trade
A. limit
Why should a businessperson understand business cycles?
A. to determine the cause of each cycle
B. to prevent the cycles from happening
C. to make plans that will level out cycles
D. to predict the exact beginning of cycles
C. to make plans that will level out cycles
When interest rates continue to increase to a high level, the economy might experience a/an:
A. expansion.
B. liability.
C. recession.
D. shortage.
C. recession.
When the Consumer Price Index (CPI) increases sharply, stock prices usually:
A. fall.
B. rise.
C. stay the same.
D. fluctuate daily.
A. fall.
Some businesses sell their goods and services to individuals, businesses, or governments in other countries. This is an example of:
A. domestic trading.
B. deficit trading.
C. importing.
D. exporting.
D. exporting.
What is the difference between a stock’s ask price and buy price?
A. The ask price and buy price are usually equal.
B. The ask price is usually higher than the buy price.
C. The ask price is the sell price, while the buy price is the bid price.
D. The ask price is the bid price, while the buy price is the sell price.
C. The ask price is the sell price, while the buy price is the bid price.
One factor that contributed to financial globalization was the shift of many developed countries from:
A. floating exchange rates to fixed exchange rates.
B. fixed exchange rates to floating exchange rates.
C. declining exchange rates to pegged exchange rates.
D. pegged exchange rates to declining exchange rates.
B. fixed exchange rates to floating exchange rates.
When consumer purchasing power decreases, the economy will experience a period of:
A. containment.
B. contraction.
C. emergence.
D. expansion.
B. contraction.
When nominal gross domestic product (GNP) rises, the money supply typically:
A. increases.
B. decreases.
C. stays the same.
D. fluctuates daily.
A. increases.
Which is a benefit of global trade?
A. an increased trade deficit
B. stronger trade restrictions
C. an improved standard of living
D. higher prices for goods and services
C. an improved standard of living
Which is the most likely result of institutional investors buying a number of shares of a company's stock?
A. Analysts recommend that investors sell stock holdings of the company.
B. Individual investors purchase shares of stock from the company.
C. The company introduces a new business model.
D. The company introduces a new product.
B. Individual investors purchase shares of stock from the company.
What tends to occur when a country is experiencing political instability?
A. Its currency loses value.
B. Its domestic trade improves.
C. commodity trade increases.
D. Its unemployment rate decreases.
A. Its currency loses value.
A large number of underemployed workers indicates a problem in the economy, because underemployment means that:
A. many people have stopped looking for work.
B. there are insufficient jobs for qualified people.
C. seasonal employees work only part of the year.
D. some employees are taking time off between jobs.
B. there are insufficient jobs for qualified people.
This year’s nominal GDP is higher than last year’s even though production stayed the same. The higher GDP figure is the result of:
A. inflation.
B. a trade deficit.
C. unemployment.
D. increased imports.
A. inflation.
Why might some nations be dependent on other nations?
A. different standards of living
B. unfavorable balance of payments
C. unequal distribution of resources
D. restrictions on foreign competition
C. unequal distribution of resources
At a stock exchange, specialists have responsibility for:
A. keeping a stock's price as low as possible.
B. keeping a stock's price as high as possible.
C. all of the trades made on a particular stock.
D. all of the trades made for institutional stock investors.
C. all of the trades made on a particular stock.
Which will occur if the U.S. dollar increases in value?
A. Exports will increase.
B. Imports will increase.
C. A trade surplus will result.
D. More foreign tourists will visit.
B. Imports will increase.
For calculating the gross domestic product, wages paid to U.S. military personnel are categorized as:
A. private investment.
B. consumer spending.
C. government purchases.
D. personal consumption expenditures.
C. government purchases.
Ups and downs in the level of economic activity over a period of time are called a/an:
A. business cycle.
B. inventory level.
C. economic growth.
D. economic system.
A. business cycle.
Online chat forums and other online communities that enable businesses to learn about the wants and needs of their worldwide target market have created a new form of:
A. gender roles.
B. class systems.
C. cultural values.
D. social relationships.
D. social relationships.
When people invest in stocks, what primarily drives their actions?
A. expectations
B. information
C. performance
D. recommendations
A. expectations
An insurance underwriter:
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.
C. reviews individual applications for insurance to evaluate the degree of risk involved and determine the acceptance of applications.