Question 1

Inflation

Accepted Answer

A) is the rate at which the general level of prices is increasing. 
B) rates are high when the economy is considered to be "overheated." 
C) is unrelated to unemployment rates. 
D) is the rate at which the general level of prices is increasing, and rates are high when the economy is considered to be "overheated." 
A) is the rate at which the general level of prices is increasing. 
B) rates are high when the economy is considered to be "overheated." 
C) is unrelated to unemployment rates. 
D) is the rate at which the general level of prices is increasing, and rates are high when the economy is considered to be "overheated."

Question 2

________ is a proposition that a strong proponent of supply-side economics would most likely stress.

Accepted Answer

A) Higher marginal tax rates will lead to a reduction in the size of the budget deficit and lower interest rates as they depend on government revenues 
B) Higher marginal tax rates promote economic inefficiency and thereby retard aggregate output as they encourage investors to undertake low productivity projects with substantial tax shelter benefits 
C) Income redistribution payments will exert little impact on real aggregate supply as they do not consume resources directly 
D) A tax reduction will increase the disposable income of households, and thus, the primary impact of a tax reduction on aggregate supply will stem from the influence of the tax change on the size of the budget deficit or surplus 
A) Higher marginal tax rates will lead to a reduction in the size of the budget deficit and lower interest rates as they depend on government revenues 
B) Higher marginal tax rates promote economic inefficiency and thereby retard aggregate output as they encourage investors to undertake low productivity projects with substantial tax shelter benefits 
C) Income redistribution payments will exert little impact on real aggregate supply as they do not consume resources directly 
D) A tax reduction will increase the disposable income of households, and thus, the primary impact of a tax reduction on aggregate supply will stem from the influence of the tax change on the size of the budget deficit or surplus

Question 3

If interest rates decrease, business investment expenditures are likely to ______, and consumer durable expenditures are likely to _________.

Accepted Answer

A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease 
A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease

Question 4

Two firms, C and D, both produce coat hangers.The price of coat hangers is $1.20 each.Firm C has total fixed costs of $750,000 and variable costs of 30' per coat hanger.Firm D has total fixed costs of $400,000 and variable costs of 50' per coat hanger.The corporate tax rate is 40%.If the economy is strong, each firm will sell 2,000,000 coat hangers.If the economy enters a recession, each firm will sell 1,400,000 coat hangers. If the economy enters a recession, the before-tax profit of firm C will be

Accepted Answer

A) $1,680,000. 
B) $1,170,000. 
C) $510,000. 
D) $204,000. 
A) $1,680,000. 
B) $1,170,000. 
C) $510,000. 
D) $204,000.

Question 5

If the economy were going into a recession, an attractive industry to invest in would be the

Accepted Answer

A) automobile industry. 
B) medical services industry. 
C) construction industry. 
D) automobile and construction industries. 
A) automobile industry. 
B) medical services industry. 
C) construction industry. 
D) automobile and construction industries.

Question 6

A top-down analysis of a firm's prospects starts with

Accepted Answer

A) an examination of the firm's industry. 
B) an evaluation of the firm's position within its industry. 
C) a forecast of interest-rate movements. 
D) an assessment of the broad economic environment. 
A) an examination of the firm's industry. 
B) an evaluation of the firm's position within its industry. 
C) a forecast of interest-rate movements. 
D) an assessment of the broad economic environment.

Question 7

If the economy is shrinking, firms with high operating leverage will experience

Accepted Answer

A) larger decreases in profits than firms with low operating leverage. 
B) similar decreases in profits as firms with low operating leverage. 
C) smaller decreases in profits than firms with low operating leverage. 
D) no change in profits. 
A) larger decreases in profits than firms with low operating leverage. 
B) similar decreases in profits as firms with low operating leverage. 
C) smaller decreases in profits than firms with low operating leverage. 
D) no change in profits.

Inflation

________ is a proposition that a strong proponent of supply-side economics would most likely stress.

If interest rates decrease, business investment expenditures are likely to , and consumer durable expenditures are likely to ___.

If the economy were going into a recession, an attractive industry to invest in would be the

A top-down analysis of a firm's prospects starts with

If the economy is shrinking, firms with high operating leverage will experience

The Investment Environment

Financial Markets, Asset Classes and Financial Instruments

How Securities Are Traded

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioural Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Equity Valuation Models

Financial Statement Analysis

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

Exam 17: Macroeconomic and Industry Analysis

Inflation

________ is a proposition that a strong proponent of supply-side economics would most likely stress.

If interest rates decrease, business investment expenditures are likely to ______, and consumer durable expenditures are likely to _________.

If the economy were going into a recession, an attractive industry to invest in would be the

A top-down analysis of a firm's prospects starts with

If the economy is shrinking, firms with high operating leverage will experience

The Investment Environment

Financial Markets, Asset Classes and Financial Instruments

How Securities Are Traded

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioural Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Equity Valuation Models

Financial Statement Analysis

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

If interest rates decrease, business investment expenditures are likely to , and consumer durable expenditures are likely to ___.