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Question 1 of 10
1. Question
Which of the following best defines business cycle?
Correct
Business cycle refers to the various stages of growth and retraction in an economy.
Incorrect
Business cycle refers to the various stages of growth and retraction in an economy.
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Question 2 of 10
2. Question
The following are the stages of business cycle except:
Correct
The four stages of the business cycle are: Contraction, trough, expansion and peak.
Incorrect
The four stages of the business cycle are: Contraction, trough, expansion and peak.
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Question 3 of 10
3. Question
Which of the following defines the contraction period of the business cycle?
Correct
In contraction, growth in the economy has begun to slow, and decline sets in.
Incorrect
In contraction, growth in the economy has begun to slow, and decline sets in.
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Question 4 of 10
4. Question
At what stage of the business cycle are recessions often seen?
Correct
Recessions are often seen during the troughs of economic times.
Incorrect
Recessions are often seen during the troughs of economic times.
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Question 5 of 10
5. Question
What is the regulatory body for monetary policy and fiscal policy respectively?
Correct
The key difference between monetary policy and fiscal policy are the organizations regulating each. Monetary policy in the United States is set and enacted by the Federal Reserve Bank. Fiscal policy is legislated through Congress.
Incorrect
The key difference between monetary policy and fiscal policy are the organizations regulating each. Monetary policy in the United States is set and enacted by the Federal Reserve Bank. Fiscal policy is legislated through Congress.
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Question 6 of 10
6. Question
What is monetary policy?
Correct
Monetary policy is the means by which the monetary authority (central bank, currency board, etc.) regulate the money supply.
Incorrect
Monetary policy is the means by which the monetary authority (central bank, currency board, etc.) regulate the money supply.
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Question 7 of 10
7. Question
Which of the following is a false statement?
Correct
If a given business sells exported goods priced in USD to foreign countries, then a stronger dollar will relatively de
crease demand for that business’s exports.
The same is true in reverse for a weaker dollar, which could comparatively increase demand for that business’s goods in foreign countries.
An increase in the strength of a foreign currency relative to the domestic currency will directly cause that investment’s value to increase.
The increase or decrease in investment returns due to currency strength can counteract or accelerate the gain or loss of an investment that is more intermingled with the global economy.Incorrect
If a given business sells exported goods priced in USD to foreign countries, then a stronger dollar will relatively de
crease demand for that business’s exports.
The same is true in reverse for a weaker dollar, which could comparatively increase demand for that business’s goods in foreign countries.
An increase in the strength of a foreign currency relative to the domestic currency will directly cause that investment’s value to increase.
The increase or decrease in investment returns due to currency strength can counteract or accelerate the gain or loss of an investment that is more intermingled with the global economy. -
Question 8 of 10
8. Question
Which of the following best defines a strong dollar or unit of currency?
Correct
A strong dollar is a dollar (or unit of currency) that can be exchanged for greater amounts of foreign currency than its present value.
Incorrect
A strong dollar is a dollar (or unit of currency) that can be exchanged for greater amounts of foreign currency than its present value.
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Question 9 of 10
9. Question
The following statements are false except:
Correct
When a specific country’s currency is stronger than other countries’ currencies with whom the country transacts business, imports tend to be available more cheaply because the country with the stronger currency can exchange it for more of the foreign currency. Exports suffer because the country with the weaker currency tends to buy its goods domestically as it does not lose value in currency conversion at home. A strong dollar is not necessarily good for an economy as it tends to slow growth by hindering sales of exports.
Incorrect
When a specific country’s currency is stronger than other countries’ currencies with whom the country transacts business, imports tend to be available more cheaply because the country with the stronger currency can exchange it for more of the foreign currency. Exports suffer because the country with the weaker currency tends to buy its goods domestically as it does not lose value in currency conversion at home. A strong dollar is not necessarily good for an economy as it tends to slow growth by hindering sales of exports.
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Question 10 of 10
10. Question
Which of the following statement is false?
Correct
Bond values have an inverse relationship to the yield the bond pays. In a rising interest rate environment, new bonds produce higher yields for the same outlay of principal to the investor. This decreases the demand for existing bonds, and the value falls accordingly.
Incorrect
Bond values have an inverse relationship to the yield the bond pays. In a rising interest rate environment, new bonds produce higher yields for the same outlay of principal to the investor. This decreases the demand for existing bonds, and the value falls accordingly.