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Multiple Choice Quiz
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1

An example of a highly cyclical industry is
A)the tobacco industry.
B)the automobile industry.
C)the food industry.
D)A and C
E)B and C
2

The most widely used monetary tool is
A)open market operations.
B)altering the reserve requirements.
C)altering the discount rate.
D)altering marginal tax rates.
E)none of the above.
3

Monetary policy is determined by
A)presidential mandates.
B)government budget decisions.
C)congressional actions.
D)the board of Governors of the Federal Reserve System.
E)none of the above
4

GDP refers to
A)the amount of personal disposable income in the economy.
B)the total production of goods and services in the economy.
C)the total manufacturing output in the economy.
D)the difference between government spending and government revenues.
E)none of the above
5

The stock price index and new orders for non-defense capital goods are
A)lagging economic indicators.
B)coincidental economic indicators.
C)leading economic indicators.
D)not useful as economic indicators.
E)none of the above
6

The Standard Industry Classification codes
A)are assigned by the U. S. government.
B)group firms by industry.
C)are a perfect classification system for firms.
D)A and B
E)B and C
7

Fiscal policy is difficult to implement quickly because
A)it requires political negotiations.
B)increases in tax rates affect consumer spending gradually.
C)much of government spending is non-discretionary and cannot be changed.
D)A and B
E)A and C
8

Supply-side economists wishing to stimulate the economy are most likely to recommend
A)a decrease in the money supply.
B)a decrease in the tax rate.
C)an increase in the real interest rate.
D)a decrease in production output.
E)none of the above
9

In the start-up stage of the industry life-cycle
A)it is difficult to predict which firms will succeed and which firms will fail.
B)firms pay a high level of dividends.
C)industry growth is very rapid.
D)A and B
E)A and C
10

The process of estimating the dividends and earnings that can be expected from the firm based on determinants of value is called
A)business cycle forecasting.
B)macroeconomic forecasting.
C)fundamental analysis.
D)technical analysis.
E)none of the above





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