BLOOMBERG UPDATED ACTUAL Questions and CORRECT Answers
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BLOOMBERG
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BLOOMBERG
BLOOMBERG UPDATED ACTUAL
Questions and CORRECT Answers
How accurately do GDP statistics portray the economy and why? - CORRECT ANSWER-
Just because they are official and numerical does not mean they are accurate. The term
"domestic" in GDP unambiguously links to a nation state.
Why is econom...
BLOOMBERG UPDATED ACTUAL
Questions and CORRECT Answers
How accurately do GDP statistics portray the economy and why? - CORRECT ANSWER-
✔✔Just because they are official and numerical does not mean they are accurate. The term
"domestic" in GDP unambiguously links to a nation state.
Why is economic data helpful in the investment process? - CORRECT ANSWER- ✔✔If an
economy is doing well then certain companies will sell more of their product as household
budgets also increase.
What 5 data inputs matters most to investors? - CORRECT ANSWER- ✔✔Economic
growth, inflation, unemployment, business confidence, and housing.
How do you calculate GDP? - CORRECT ANSWER- ✔✔GDP= C + I = G + (X-M). C=
Personal consumption. I= private investment. G= government consumption. X= exports. M=
imports. (X-M)= net exports.
nominal growth (growth rate) - CORRECT ANSWER- ✔✔increases in production and
increases in price
real GDP - CORRECT ANSWER- ✔✔isolates increases in production
If growth rate (nominal GDP) = inflation rate, then... - CORRECT ANSWER- ✔✔real
growth rate is at zero.
If Nominal GDP rate > inflation rate, then... - CORRECT ANSWER- ✔✔Real Growth Rate
is positive.
Is the economy cyclical? - CORRECT ANSWER- ✔✔Yes, there are quarters of growth and
recession.
Recession - CORRECT ANSWER- ✔✔two successive quarters of negative real GDP growth
, Inflation (CPI) - CORRECT ANSWER- ✔✔unveils the real growth in the economy. It can
erode the value of bonds. It means that a unit of money tomorrow buys less than the same
unit of money would buy today. This accounts for the rising cost of living. Increase in prices
of goods and services that diminishes purchasing power of money.
What are the two sources for inflation reports? - CORRECT ANSWER- ✔✔GDP Report:
based on whole economy. Consumer Price Index: based on representative basket of goods,
and services, like food, housing and automobiles
How does time change representative inflation baskets? - CORRECT ANSWER- ✔✔With
changes in technology. Like DVD players are replaced with online streaming.
If nominal GDP growth line or percentage is less than the real GDP, then... - CORRECT
ANSWER- ✔✔there is deflation.
Why is unemployment so important to the US economy? - CORRECT ANSWER- ✔✔The
fact that the US is largely a consumer economy leads to the tight connection between US
employment and US GDP. An overall increase in unemployment depresses GDP growth.
When the economy shrinks, employment declines.
Nonfarm payrolls - CORRECT ANSWER- ✔✔measure the change in the number of people
with jobs and during a recession, this goes down. This is the unemployment report.
Business confidence (PMI): - CORRECT ANSWER- ✔✔business people make large
investments and hire people when they think there will be additional demand in the future.
BEST LEADING INDICATOR TO ALERT FORTHCOMING TURNING POINTS.
The Institute for Supply Management (ISM) - CORRECT ANSWER- ✔✔Surveys people in
charge of buying goods and services for corporations about business conditions. It has the
most widely followed index of US business confidence. Above 50= optimism. Below 50=
pessimism.
Can PMI indicate GDP growth? - CORRECT ANSWER- ✔✔Yes, for most recessions
shown, the PMI indicator dipped shortly before GDP decline. You can predict GDP decline.
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