Which of the following is an exogenous variable in the Three-Sector-Model?
a. Industry risk
b. Country risk
c. Real risk-free interest rate
d. Credit risk
e. All of the above are exogenous variables.
Question 2 - Which of the following definitions or statements is not correct?
a. The entire business cycle can be measured from one peak to the next peak.
b. Oddly enough, if you consider the entire business cycle, they all have the same duration.
c. The entire business cycle can be measured from one trough to the next trough.
d. An expansion occurs when broad-based economic activity improves significantly and lasts for more than a few months.
e. A recession occurs when there is a significant contraction in economic activity that is spread broadly across the economy and lasts for more than a few months.
Question 3 - Which of the following is an exogenous variable in the Three-Sector-Model?
a. Credit risk
b. Country risk
c. Expected inflation
d. Industry risk
e. Real risk-free interest rate
Question 4 - What is an appropriate definition for business cycles?
a. Business cycles reflect the flow of money between businesses, individuals, and the government.
b. Business cycles are recurring, regular, and systematic movements in nominal economic activity around a long term trend.
c. Business cycles are recurring, regular, and systematic movements in real economic activity around a long term trend.
d. Business cycles are recurring, irregular, and unsystematic movements in real economic activity around a long term trend.
e. None of the above.
Question 5 - Which of the following is an endogenous variable in the Three-Sector-Model?
a. Wars
b. Tax rate increases by the government
c. A change from flexible to fixed exchange rates
d. Domestic quantity of real credit per time period
e. All of the above are endogenous
Question 6 - Predicting the future is very difficult to do. Which of the following is not a reason for this difficulty?
a. Economists often use historic trends to predict the future, but these historic trends rarely stay the same.
b. Economists often use historic interrelationships to predict the future, but these interrelationship trends rarely stay the same.
c. A very broad range and combination of economic variables can influence the economic activity.
d. Economists often use major historic shocks (such as energy crises) to predict the future, but these major shocks occur irregularly.
Question 7 - Which of the following is an endogenous variable in the Three-Sector-Model?
a. A change from flexible to fixed exchange rates
b. Wars
c. Domestic quantity of real credit per time period
d. Oil prices
e. All of the above are endogenous
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