Question 1

Which of the following is not in the index of leading economic indicators?

Accepted Answer

A)  Average workweek 
B)  Initial unemployment claims 
C)  Building permits 
D)  Producer price index 
A)  Average workweek 
B)  Initial unemployment claims 
C)  Building permits 
D)  Producer price index

Question 2

"Good news" about an expenditure-related indicator means that

Accepted Answer

A)  it is higher than its previous value. 
B)  it is higher than it was expected to be. 
C)  it is lower than its previous value. 
D)  it rose faster than the rate of inflation. 
A)  it is higher than its previous value. 
B)  it is higher than it was expected to be. 
C)  it is lower than its previous value. 
D)  it rose faster than the rate of inflation.

Question 3

An unexpected fall in Retail Sales should send bond prices __________ and stock prices __________.

Accepted Answer

A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down 
A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down

Question 4

For a ten-year $1,000,000-face-value zero-coupon Treasury bond, how does its market price change when the interest rate goes from 6.84% to 6.92%?

Accepted Answer

A)  A fall of $1192 
B)  A fall of $3848 
C)  A fall of $8000 
D)  A rise of $8000 
A)  A fall of $1192 
B)  A fall of $3848 
C)  A fall of $8000 
D)  A rise of $8000

Question 5

The Bureau of Labor Statistics unveils an unemployment rate figure every

Accepted Answer

A)  two weeks. 
B)  month. 
C)  two months. 
D)  quarter. 
A)  two weeks. 
B)  month. 
C)  two months. 
D)  quarter.

Question 6

Suppose that during a given month 200,000 persons who had been self-employed leave their business and get jobs working for other businesses. This might give __________ bias to the __________ indicator.

Accepted Answer

A)  an optimistic; unemployment rate 
B)  a pessimistic; unemployment rate 
C)  an optimistic; payroll employment 
D)  a pessimistic; payroll employment 
A)  an optimistic; unemployment rate 
B)  a pessimistic; unemployment rate 
C)  an optimistic; payroll employment 
D)  a pessimistic; payroll employment

Question 7

An unexpected rise in the growth rate of the CPI should send bond prices __________ and stock prices __________.

Accepted Answer

A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down 
A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down

Question 8

An unexpected drop in the LEI should send bond prices __________ and stock prices __________.

Accepted Answer

A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down 
A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down

Question 9

An unexpected fall in Capacity Utilization should send bond prices __________ and stock prices __________.

Accepted Answer

A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down 
A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down

Question 10

The Purchasing Managers' Index is __________ indicator.

Accepted Answer

A)  a leading 
B)  a coincident 
C)  a lagging 
D)  an inconsistent 
A)  a leading 
B)  a coincident 
C)  a lagging 
D)  an inconsistent

Question 11

A ten-year $1,000,000-face-value zero-coupon Treasury bond has a market price of __________ when the interest rate is 9.62%.

Accepted Answer

A)  $399,119 
B)  $674,844 
C)  $903,800 
D)  $962,000 
A)  $399,119 
B)  $674,844 
C)  $903,800 
D)  $962,000

Question 12

An unexpected fall in GDP growth should send bond prices __________ and stock prices __________.

Accepted Answer

A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down 
A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down

Question 13

An unexpected rise in Capacity Utilization should send bond prices __________ and stock prices __________.

Accepted Answer

A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down 
A)  up; up 
B)  up; down 
C)  down; up 
D)  down; down

Question 14

The BLS monthly household survey involves about __________ households in the United States.

Accepted Answer

A)  6,000 
B)  60,000 
C)  600,000 
D)  6,000,000 
A)  6,000 
B)  60,000 
C)  600,000 
D)  6,000,000

Question 15

A Purchasing Manager's Index below 50 indicates

Accepted Answer

A)  a declining retail sector. 
B)  a downturn in economic activity. 
C)  an increase in bond prices in the near future. 
D)  a declining manufacturing sector. 
A)  a declining retail sector. 
B)  a downturn in economic activity. 
C)  an increase in bond prices in the near future. 
D)  a declining manufacturing sector.

Question 16

A ten-year $1,000,000-face-value zero-coupon Treasury bond has a market price of __________ when the interest rate is 6.34%.

Accepted Answer

A)  $366,000 
B)  $936,600 
C)  $784,902 
D)  $540,796 
A)  $366,000 
B)  $936,600 
C)  $784,902 
D)  $540,796

Question 17

A person with two jobs is counted __________ in the household survey and __________ in the establishment survey.

Accepted Answer

A)  once; once 
B)  once; twice 
C)  twice; once 
D)  twice; twice 
A)  once; once 
B)  once; twice 
C)  twice; once 
D)  twice; twice

Question 18

Good news about an economic indicator __________ the denominator of a bond's valuation formula, __________ the bond's price.

Accepted Answer

A)  raises; raising 
B)  raises; lowering 
C)  lowers; raising 
D)  lowers; lowering 
A)  raises; raising 
B)  raises; lowering 
C)  lowers; raising 
D)  lowers; lowering

Exam 29: Tying It All Together

Which of the following is not in the index of leading economic indicators?

"Good news" about an expenditure-related indicator means that

An unexpected fall in Retail Sales should send bond prices __________ and stock prices __________.

For a ten-year $1,000,000-face-value zero-coupon Treasury bond, how does its market price change when the interest rate goes from 6.84% to 6.92%?

The Bureau of Labor Statistics unveils an unemployment rate figure every

Suppose that during a given month 200,000 persons who had been self-employed leave their business and get jobs working for other businesses. This might give __________ bias to the __________ indicator.

An unexpected rise in the growth rate of the CPI should send bond prices __________ and stock prices __________.

An unexpected drop in the LEI should send bond prices __________ and stock prices __________.

An unexpected fall in Capacity Utilization should send bond prices __________ and stock prices __________.

The Purchasing Managers' Index is __________ indicator.

A ten-year $1,000,000-face-value zero-coupon Treasury bond has a market price of __________ when the interest rate is 9.62%.

An unexpected fall in GDP growth should send bond prices __________ and stock prices __________.

An unexpected rise in Capacity Utilization should send bond prices __________ and stock prices __________.

The BLS monthly household survey involves about __________ households in the United States.

A Purchasing Manager's Index below 50 indicates

A ten-year $1,000,000-face-value zero-coupon Treasury bond has a market price of __________ when the interest rate is 6.34%.

A person with two jobs is counted __________ in the household survey and __________ in the establishment survey.

Good news about an economic indicator __________ the denominator of a bond's valuation formula, __________ the bond's price.

Introducing Money, Banking, and Financial Markets

The Role of Money in the Macroeconomy

Financial Instruments, Markets, and Institutions

Interest Rate Measurement and Behavior

The Term and Risk Structure of Interest Rates

The Structure and Performance of Securities Markets

The Pricing of Risky Financial Assets

Money and Capital Markets

Demystifying Derivatives

Understanding Foreign Exchange

The Nature of Financial Intermediation

Depository Financial Institutions

Nondepository Financial Institutions

Understanding Financial Contracts

The Regulation of Markets and Institutions

Financial System Design

Who's in Charge Here?

Bank Reserves and the Money Supply

The Instruments of Central Bankin

Understanding Movements in Bank Reserves

Monetary Policy Strategy

The Classical Foundations

The Keynesian Framework

The ISLM World

Money and Economic Stability in the ISLM World

An Aggregate Supply and Demand Perspective on Money and Economic Stability

Rational Expectations: Theory and Policy Implications

Empirical Evidence on the Effectiveness of Monetary Policy

Filters

An unexpected fall in Retail Sales should send bond prices and stock prices .

Suppose that during a given month 200,000 persons who had been self-employed leave their business and get jobs working for other businesses. This might give bias to the indicator.

An unexpected rise in the growth rate of the CPI should send bond prices and stock prices .

An unexpected drop in the LEI should send bond prices and stock prices .

An unexpected fall in Capacity Utilization should send bond prices and stock prices .

An unexpected fall in GDP growth should send bond prices and stock prices .

An unexpected rise in Capacity Utilization should send bond prices and stock prices .

A person with two jobs is counted in the household survey and in the establishment survey.

Good news about an economic indicator the denominator of a bond's valuation formula, the bond's price.