File: Ch. 13, Chapter 13: Economy Market Analysis
Multiple Choice Questions
1. U.S. investors can buy equities from companies that comprise more than what
fraction of the world’s market capitalization and what fraction of the world’s
GDP.
a. 1/5th world market cap, 1/4th world GDP
b. 1/4th world market cap, 1/3rd world GDP
c. 1/3rd world market cap, 1/2 world GDP
d. 1/2 world market cap, 2/3rds world GDP
Ans: d
Difficulty: Easy
Ref: Taking a Global Perspective
2. Multinational companies often follow the U.S. lead in restructuring processes and
adopting new technologies. As a consequence,
a. foreign equities markets are driven by earnings growth and political
considerations, like U.S. equities markets.
b. foreign equities markets are driven by earnings growth and political
considerations, unlike U.S. equities markets.
c. foreign equities markets are driven by earnings growth and interest rate changes,
like U.S. equities markets.
d. foreign equities markets are driven by earnings growth and interest rate changes,
unlike U.S. equities markets.
Ans: c
Difficulty: Moderate
Ref: Taking a Global Perspective
3. Gross Domestic Product (GDP) is a basic measure of the economy, and is defined
as the market value of what items produced by an economy for some time period
(typically a year)?
a. final goods.
b. final goods and services.
c. final goods, services, and labor.
d. final goods, services, labor, and capital.
Ans: b
Difficulty: Easy
Ref: Assessing the Economy
Chapter Thirteen 163
Economy/Market Analysis
, 4. The Bureau of Economic Analysis of the U.S. Government releases advance
estimates of quarterly GDP in the first month following quarter end. In the second month,
it provides a preliminary estimate. In the third, it provides a “final” estimate (though even
this estimate is subject to annual revisions). Over the past 30 years, the average revision
of GDP growth rate from advance to final has been approximately what fraction of a
percentage point?
a. 1/4.
b. 1/3.
c. 1/2.
d. 2/3.
Ans: c
Difficulty: Moderate
Ref: Assessing the Economy
5. The advance estimate of GDP predicts direction of quarterly change in real GDP
growth approximately what percent of the time?
a. 10%.
b. 25%.
c. 75%.
d. 90%.
Ans: d
Difficulty: Moderate
Ref: Assessing the Economy
6. The period from a peak to a trough is:
a. a cycle.
b. an inflection point.
c. a recession.
d. a depression.
Ans: c
Difficulty: Moderate
Ref: Assessing the Economy
7. In the U.S. since the end of World War II, the typical business cycle consists of an
expansion of how many months?
a. 57.
b. 66.
c. 75.
d. 84.
Ans: a
Difficulty: Moderate
Chapter Thirteen 164
Economy/Market Analysis
Multiple Choice Questions
1. U.S. investors can buy equities from companies that comprise more than what
fraction of the world’s market capitalization and what fraction of the world’s
GDP.
a. 1/5th world market cap, 1/4th world GDP
b. 1/4th world market cap, 1/3rd world GDP
c. 1/3rd world market cap, 1/2 world GDP
d. 1/2 world market cap, 2/3rds world GDP
Ans: d
Difficulty: Easy
Ref: Taking a Global Perspective
2. Multinational companies often follow the U.S. lead in restructuring processes and
adopting new technologies. As a consequence,
a. foreign equities markets are driven by earnings growth and political
considerations, like U.S. equities markets.
b. foreign equities markets are driven by earnings growth and political
considerations, unlike U.S. equities markets.
c. foreign equities markets are driven by earnings growth and interest rate changes,
like U.S. equities markets.
d. foreign equities markets are driven by earnings growth and interest rate changes,
unlike U.S. equities markets.
Ans: c
Difficulty: Moderate
Ref: Taking a Global Perspective
3. Gross Domestic Product (GDP) is a basic measure of the economy, and is defined
as the market value of what items produced by an economy for some time period
(typically a year)?
a. final goods.
b. final goods and services.
c. final goods, services, and labor.
d. final goods, services, labor, and capital.
Ans: b
Difficulty: Easy
Ref: Assessing the Economy
Chapter Thirteen 163
Economy/Market Analysis
, 4. The Bureau of Economic Analysis of the U.S. Government releases advance
estimates of quarterly GDP in the first month following quarter end. In the second month,
it provides a preliminary estimate. In the third, it provides a “final” estimate (though even
this estimate is subject to annual revisions). Over the past 30 years, the average revision
of GDP growth rate from advance to final has been approximately what fraction of a
percentage point?
a. 1/4.
b. 1/3.
c. 1/2.
d. 2/3.
Ans: c
Difficulty: Moderate
Ref: Assessing the Economy
5. The advance estimate of GDP predicts direction of quarterly change in real GDP
growth approximately what percent of the time?
a. 10%.
b. 25%.
c. 75%.
d. 90%.
Ans: d
Difficulty: Moderate
Ref: Assessing the Economy
6. The period from a peak to a trough is:
a. a cycle.
b. an inflection point.
c. a recession.
d. a depression.
Ans: c
Difficulty: Moderate
Ref: Assessing the Economy
7. In the U.S. since the end of World War II, the typical business cycle consists of an
expansion of how many months?
a. 57.
b. 66.
c. 75.
d. 84.
Ans: a
Difficulty: Moderate
Chapter Thirteen 164
Economy/Market Analysis
