Page 1 of 58
SERIES 7 CHAPTER 14 ECONOMICS AND ANALYSIS
EXAM 117 QUESTIONS 2025/2026 WITH 100%
CORRECT ANSWER
Economics .......ANSWER......study of supply and demand
businesses cycle cycle through what 4 stages .......ANSWER......1)
expansion
2) peak
3) contraction
4) trough
expansion .......ANSWER......increased business activity
1) increased demand
2) increased production
3) rising stock price
4) rising property values
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5) increasing gross domestic products
peak .......ANSWER......top of the expansion phase before
contraction
contraction .......ANSWER......business activity declines
1) rising # of bankruptcies and bond defaults
2) higher customer debt
3) falling stock prices
4) rising inventories
5) declining gross domestic product
trough .......ANSWER......when business activity stops declining and
levels off
Gross domestic product(GDP) .......ANSWER......a nations annual
economic output: all goods and services produced within a nation
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another term for it is Gross national product(GNP)
consumer price index(CPI) .......ANSWER......most prominent
measure of general price changes
measures the rate of increase or decrease in a broad range of
customer prices , such as food, housing, transportation, medical
care, clothing, electricity, entertainment, and services
how often is CPI computed .......ANSWER......Quarterly
inflation .......ANSWER......mild inflation can encourage economic
growth because the increase in prices stimulates business
investments
high inflation reduces a dollar's buying power, which hurts
economy
increased inflation drives up interest rates for fixed income
securities, drives down bond prices.
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inflation is a general barometer of the direction of price levels.
low inflation periods have stable prices and low interest rates,
positive for stock mkt
does the CPI use a actual dollar or constant dollar adjustment to
account for inflation .......ANSWER......constant dollar
when does deflation usually occur .......ANSWER......during severe
recessions when unemployment is on the rise
stagnation .......ANSWER......refers to prolonged periods of slow
or little economic growth, usually accompanied by high
unemployment
stagflation .......ANSWER......term used to describe the unusual
combination of inflation and high inflation(stagnation).
occurs when economy isn't growing, lack of demand
SERIES 7 CHAPTER 14 ECONOMICS AND ANALYSIS
EXAM 117 QUESTIONS 2025/2026 WITH 100%
CORRECT ANSWER
Economics .......ANSWER......study of supply and demand
businesses cycle cycle through what 4 stages .......ANSWER......1)
expansion
2) peak
3) contraction
4) trough
expansion .......ANSWER......increased business activity
1) increased demand
2) increased production
3) rising stock price
4) rising property values
,Page 2 of 58
5) increasing gross domestic products
peak .......ANSWER......top of the expansion phase before
contraction
contraction .......ANSWER......business activity declines
1) rising # of bankruptcies and bond defaults
2) higher customer debt
3) falling stock prices
4) rising inventories
5) declining gross domestic product
trough .......ANSWER......when business activity stops declining and
levels off
Gross domestic product(GDP) .......ANSWER......a nations annual
economic output: all goods and services produced within a nation
,Page 3 of 58
another term for it is Gross national product(GNP)
consumer price index(CPI) .......ANSWER......most prominent
measure of general price changes
measures the rate of increase or decrease in a broad range of
customer prices , such as food, housing, transportation, medical
care, clothing, electricity, entertainment, and services
how often is CPI computed .......ANSWER......Quarterly
inflation .......ANSWER......mild inflation can encourage economic
growth because the increase in prices stimulates business
investments
high inflation reduces a dollar's buying power, which hurts
economy
increased inflation drives up interest rates for fixed income
securities, drives down bond prices.
, Page 4 of 58
inflation is a general barometer of the direction of price levels.
low inflation periods have stable prices and low interest rates,
positive for stock mkt
does the CPI use a actual dollar or constant dollar adjustment to
account for inflation .......ANSWER......constant dollar
when does deflation usually occur .......ANSWER......during severe
recessions when unemployment is on the rise
stagnation .......ANSWER......refers to prolonged periods of slow
or little economic growth, usually accompanied by high
unemployment
stagflation .......ANSWER......term used to describe the unusual
combination of inflation and high inflation(stagnation).
occurs when economy isn't growing, lack of demand
