Chapter 17 Macroeconomic and Industry Analysis Answer Key
Multiple Choice Questions
1.
A top down analysis of a firm starts with
2.
An example of a highly cyclical industry is
3.
Demand-side economics is concerned with
4.
The most widely used monetary tool is
5.
The “real,” or inflation-adjusted, exchange rate is
6.
The “normal” range of price-earnings ratios for the S&P 500 Index is
7.
Monetary policy is determined by
8.
A trough is
9.
A peak is
10.
If the economy is growing, firms with high operating leverage will experience
11.
If the economy is shrinking, firms with high operating leverage will experience
12.
If the economy is growing, firms with low operating leverage will experience
13.
If the economy is shrinking, firms with low operating leverage will experience
14.
Industrial production refers to
15.
GDP refers to
16.
A rapidly growing GDP indicates a(n) ______ economy with ______ opportunity for a firm to
increase sales.
17.
A declining GDP indicates a(n) ______ economy with ______ opportunity for a firm to
increase sales.
18.
The average duration of unemployment and changes in the consumer price index for
services are
19.
A firm in an industry that is very sensitive to the business cycle will likely have a stock
beta
20.
If the economy were going into a recession, an attractive industry to invest in would be
the
21.
The stock price index and new orders for nondefense capital goods are
22.
A firm in the early stages of the industry life cycle will likely have
23.
Assume the U.S. government was to decide to increase the budget deficit. This action will
most likely cause __________ to increase.
24.
Assume the U.S. government was to decide to decrease the budget deficit. This action will
most likely cause __________ to decrease.
25.
Assume that the Federal Reserve decreases the money supply. This action will cause
________ to decrease.
26.
If the currency of your country is depreciating, the result should be to ______ exports and
to _______ imports.
27.
If the currency of your country is appreciating, the result should be to ______ exports and
to _______ imports.
28.
Increases in the money supply will cause demand for investment and consumption goods
to _______in the short run and cause prices to ________in the long run.
29.
The North American Industry Classification System (NAICS) codes
30.
If interest rates increase, business investment expenditures are likely to ______ and
consumer durable expenditures are likely to _________.
31.
Fiscal policy generally has a _______ direct impact than monetary policy on the economy,
and the formulation and implementation of fiscal policy is ______ than that of monetary
policy.
32.
Fiscal policy is difficult to implement quickly because