FINA 061 Bloomberg Market Concepts
complete new update material guide
Inaccurately because the scope of GDP measurements can change.
How accurately do GDP portray the economy and why?
It went down
Consider the formula GDP = C+I+G+(X-M). A country is undergoing a boom in consumption of
domestic and foreign luxury goods. In one year, the dollar growth in imports is greater than the dollar
growth in domestic consumption. Assuming nothing else has changed, what happened to GDP?
C= Consumer spending
I = Investment (Gross Fixed Capital Formation)
G= Government Spending
X= Exports
M= Imports
what is the meaning of each letter in the GDP formula, C+I+G+(X-M).
Sweden performed better
Here is the most important economic data for Australia and Sweden. which economy did better year-
over-year (YOY) in the fourth quarter of 2013 compared to the fourth quarter of 2012? Use the two
charts to investigate.
Consumer spending accounts for two-thirds of the U.S. economy when the number of unemployed
consumers rises, there is less consumer spending.
In the United States, why is there a strong correlation between unemployment and GDP?
The country has deflation. The bottom line is nominal growth and the top line is real growth.
Here is a chart showing both nominal GDP growth and real GDP growth for a country. Which of the
following can be a true statement at the time the chart was captured?
PMI
Which of the following lines is the best leading economic indicator?
Nonfarm payrolls go down, the PMI indicator goes DOWN, the housing starts goes down.
What typically happens to nonfarm payrolls, the PMI indicator, and housing starts at the onset of a
recession in the United States?
Timeliness of release
Which of the following qualities of economic indicators do investors prize the most?
Because GDP statistics are released well after other economic indicators.
Why is the release of GDP statistics less interesting to investors than the release of other economic
indicators?
GDP
Which of the following important U.S. economic indicators is only available on a quarterly basis?
, nonfarm payrolls
Which economic indicator is most directly linked to unemployment?
To know when specific economic data points are a positive or negative surprise.
What is the main reason that investment banks create estimates of economic indicators?
They do not consistently presage turning points.
Which of the following is the biggest pitfall of economic indicators?
Japan
Which country is the fourth biggest importer and exporter?
Hong Kong dollar against the U.S. dollar in 1997.
Which of the following is not an example of a failed peg?
The currency strengthens.
What generally happens when a central bank unexpectedly increases interest rates?
A surprise change in inflation expectations
Which driver weakened the Swiss franc?
How currencies may be overvalued or undervalued.
What does the Big Mac index show?
Surprise changes in interest rates, inflation, and trade.
Which of the following are short-term drivers of currency valuation?
Global investors are attracted by higher bond yields in high interest rate countries.
By what mechanism do interest rates affect currency values?
U.S. Stocks rally on Fed's Surprise reduction of Interest Rate.
Which of these headlines could move a currency pair?
2%
What is the most common target inflation rate for an advanced economy?
To halt the vicious cycle of deflation
What was the primary goal of Abenomics?
prices decline
Here is the vicious deflationary cycle. What step connects the lower left gray arrow to the upper right
blue arrow?
complete new update material guide
Inaccurately because the scope of GDP measurements can change.
How accurately do GDP portray the economy and why?
It went down
Consider the formula GDP = C+I+G+(X-M). A country is undergoing a boom in consumption of
domestic and foreign luxury goods. In one year, the dollar growth in imports is greater than the dollar
growth in domestic consumption. Assuming nothing else has changed, what happened to GDP?
C= Consumer spending
I = Investment (Gross Fixed Capital Formation)
G= Government Spending
X= Exports
M= Imports
what is the meaning of each letter in the GDP formula, C+I+G+(X-M).
Sweden performed better
Here is the most important economic data for Australia and Sweden. which economy did better year-
over-year (YOY) in the fourth quarter of 2013 compared to the fourth quarter of 2012? Use the two
charts to investigate.
Consumer spending accounts for two-thirds of the U.S. economy when the number of unemployed
consumers rises, there is less consumer spending.
In the United States, why is there a strong correlation between unemployment and GDP?
The country has deflation. The bottom line is nominal growth and the top line is real growth.
Here is a chart showing both nominal GDP growth and real GDP growth for a country. Which of the
following can be a true statement at the time the chart was captured?
PMI
Which of the following lines is the best leading economic indicator?
Nonfarm payrolls go down, the PMI indicator goes DOWN, the housing starts goes down.
What typically happens to nonfarm payrolls, the PMI indicator, and housing starts at the onset of a
recession in the United States?
Timeliness of release
Which of the following qualities of economic indicators do investors prize the most?
Because GDP statistics are released well after other economic indicators.
Why is the release of GDP statistics less interesting to investors than the release of other economic
indicators?
GDP
Which of the following important U.S. economic indicators is only available on a quarterly basis?
, nonfarm payrolls
Which economic indicator is most directly linked to unemployment?
To know when specific economic data points are a positive or negative surprise.
What is the main reason that investment banks create estimates of economic indicators?
They do not consistently presage turning points.
Which of the following is the biggest pitfall of economic indicators?
Japan
Which country is the fourth biggest importer and exporter?
Hong Kong dollar against the U.S. dollar in 1997.
Which of the following is not an example of a failed peg?
The currency strengthens.
What generally happens when a central bank unexpectedly increases interest rates?
A surprise change in inflation expectations
Which driver weakened the Swiss franc?
How currencies may be overvalued or undervalued.
What does the Big Mac index show?
Surprise changes in interest rates, inflation, and trade.
Which of the following are short-term drivers of currency valuation?
Global investors are attracted by higher bond yields in high interest rate countries.
By what mechanism do interest rates affect currency values?
U.S. Stocks rally on Fed's Surprise reduction of Interest Rate.
Which of these headlines could move a currency pair?
2%
What is the most common target inflation rate for an advanced economy?
To halt the vicious cycle of deflation
What was the primary goal of Abenomics?
prices decline
Here is the vicious deflationary cycle. What step connects the lower left gray arrow to the upper right
blue arrow?
