In describing the economic setting in the real goods market, which of the following economic measures is the most helpful?
a. Current GDP Price Index
b. Current GDP level
c. Current capacity utilization rate
d. Current real exchange rate
e. Current nominal exchange rate
Question 2 - Leading indicators:
a. Are near perfect predictors of the future. It is for this reason that they are relied on so heavily by governments, central banks, and the private sector.
b. Have a mixed track record for predicting business cycles and should therefore be used cautiously. Nevertheless, they still might provide some useful insights.
c. Are designed to be used in theoretical research only and therefore do not provide any value added when analyzed for business purposes.
d. Give information about an economy's performance in the past and should consequently not be used for business decisions.
Question 3 - A good way to start every Three-Sector-Model analysis is to:
a. Describe what is happening in the foreign exchange market and then proceed to explain what happens in the other two markets simultaneously.
b. Identify the economic effects that result from an economic change and then work your way backward to identify the most important part of the analysis, which is the economic shock that started it all.
c. Analyze the chain reaction of economic interactions.
d. Gather basic information about the three markets and describe qualitatively the economic setting in each market.
Question 4 - What does price stability mean?
a. Constant inflation over a given period of time.
b. No price changes for any good or service during a given period of time.
c. Low, non-volatile rates of inflation.
d. Low, volatile rates of inflation.
e. None of the above.
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