BMC Answers (Bloomberg) 2023/2024, Complete
solutions (A+ guide) University of Massachusetts,
Lowell.
Inaccurately because the scope of GDP measurements can change. - ANSWER
How accurately do GDP portray the economy and why?
It went down - ANSWER 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 - ANSWER what is the meaning of each letter in the GDP formula,
C+I+G+(X-M).
Sweden performed better - ANSWER 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. - ANSWER 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. - ANSWER 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 - ANSWER 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. - ANSWER 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 - ANSWER Which of the following qualities of economic
indicators do investors prize the most?
Because GDP statistics are released well after other economic indicators. -
ANSWER Why is the release of GDP statistics less interesting to investors than the
release of other economic indicators?
, GDP - ANSWER Which of the following important U.S. economic indicators is only
available on a quarterly basis?
nonfarm payrolls - ANSWER Which economic indicator is most directly linked to
unemployment?
To know when specific economic data points are a positive or negative surprise. -
ANSWER What is the main reason that investment banks create estimates of
economic indicators?
They do not consistently presage turning points. - ANSWER Which of the following is
the biggest pitfall of economic indicators?
Japan - ANSWER Which country is the fourth biggest importer and exporter?
Hong Kong dollar against the U.S. dollar in 1997. - ANSWER Which of the following
is not an example of a failed peg?
The currency strengthens. - ANSWER What generally happens when a central bank
unexpectedly increases interest rates?
A surprise change in inflation expectations - ANSWER Which driver weakened the
Swiss franc?
How currencies may be overvalued or undervalued. - ANSWER What does the Big
Mac index show?
Surprise changes in interest rates, inflation, and trade. - ANSWER Which of the
following are short-term drivers of currency valuation?
Global investors are attracted by higher bond yields in high interest rate countries. -
ANSWER By what mechanism do interest rates affect currency values?
U.S. Stocks rally on Fed's Surprise reduction of Interest Rate. - ANSWER Which of
these headlines could move a currency pair?
2% - ANSWER What is the most common target inflation rate for an advanced
economy?
To halt the vicious cycle of deflation - ANSWER What was the primary goal of
Abenomics?
prices decline - ANSWER Here is the vicious deflationary cycle. What step connects
the lower left gray arrow to the upper right blue arrow?
Inflation - ANSWER Were the two oil crises in the 1970s linked to deflation or
inflation?
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