SIE Unit 11 Qbank

Deflation occurs during A) A depression, coinciding with economic expansion in the business cycle. B) a recession, coinciding with economic peaks. C) a depression, coinciding with an economic trough in the business cycle. D) a recession, coinciding with an economic contraction.

a recession, coinciding with an economic contraction.

All the following are coincident indicators except A) personal income. B) trade sales. C) changes in durable goods inventories. D) retail employment.

changes in durable goods inventories. Changes in durable goods inventories (whether an increase or decrease) is a leading economic indicator. Trade sales, retail employment, and personal income are all coincident indicators.

The monthly unemployment figure is considered a A) coincident indicator. B) lagging indicator. C) dragging indicator. D) leading indicator.

coincident indicator.

All of these are leading economic indicators except A) building permits. B) the stock market as measured by the S&P 500. C) duration of unemployment. D) manufacturer's new orders.

duration of unemployment.

The measure of economic output generated from within a nation's borders is A) Consumer Price Index. B) S&P 500 Index. C) gross domestic product. D) gross national product.

gross domestic product. The gross domestic product measures all the output within a nation's borders. The gross national output is a measure of only the economic output of a country's citizens and companies, regardless of location.

A measure of a nation's citizen's economic activity is A) gross national product. B) gross domestic product. C) Consumer Price Index. D) S&P 500 Index.

gross national product. The gross national output is a measure of only the economic output of a country's citizens and companies, regardless of location. The gross domestic product measures all the output only within a nation's borders.

The measure of the inflation rate is A) the business cycle. B) the S&P 500 Index. C) the Consumer Price Index. D) the EAFE Index.

the Consumer Price Index. Inflation is an increase in prices over time. The consumer price index measures the price of a basket of goods. When comparing the value of this basket of goods, we can identify whether there's inflation or deflation occurring.

A measure of a nation's citizen's economic activity is A) S&P 500 Index. B) gross national product. C) Consumer Price Index. D) gross domestic product.

Consumer Price Index. The gross national output is a measure of only the economic output of a country's citizens and companies, regardless of location. The gross domestic product measures all the output only within a nation's borders.

All the following are lagging indicators except A) labor cost per unit of output. B) outstanding commercial loans. C) personal income. D) corporate profits.

personal income. Personal income is a coincident indicator. Corporate profits, labor cost per unit of output, and outstanding commercial loans are lagging indicators.

Increasing cost of goods and services and high unemployment are characteristics of A) inflation. B) deflation. C) stagnation. D) stagflation.

stagflation. Stagflation is the rare occurrence where the economy is contracting and income is dropping but prices are still rising.

Economic reports show that there is a general rise in prices for consumer goods and a high unemployment rate occurring simultaneously. This combination can best be described as A) stagflation. B) inflation. C) stagnation. D) deflation.

stagflation. Stagflation is the term used to describe the unusual combination of inflation (a rise in prices) and high unemployment (stagnation). This generally occurs when the economy isn't growing (there is a lack of consumer demand and business activity), yet prices for goods are still rising.

Several months of slow economic growth and rising unemployment have characterized the economy. Market analysts would describe this as a period of A) stagnation. B) deflation. C) stagflation. D) inflation.

stagnation. Stagnation is defined as prolonged periods of slow or little economic growth accompanied by high unemployment.

Which of the following is a coincident indicator? A) Increase in the duration of unemployment B) Household income C) S&P 500 Index D) Housing starts

Household income Personal or household incomes are coincident indicators, moving up and down along with the overall economy. Equity prices and housing starts are both leading indicators. Changes in the duration of unemployment is a lagging indicator.

Which of the following is a coincident indicator? A) S&P 500 Index B) Housing starts C) Household income D) Increase in the duration of unemployment

Household income Personal or household incomes are coincident indicators, moving up and down along with the overall economy. Equity prices and housing starts are both leading indicators. Changes in the duration of unemployment is a lagging indicator.

Which of the following is a lagging indicator? A) Increase in the consumer loans to personal income ratio B) Increase in hours worked C) Decrease in industrial production D) Raw materials orders

Increase in the consumer loans to personal income ratio Changes in the ratio of consumer installment credit to personal income is a lagging indicator. Changes in industrial production and hours worked are coincident indicators. Changes in raw materials orders is a leading indicator.

Which of the following is a lagging indicator? A) Raw materials orders B) Increase in hours worked C) Decrease in industrial production D) Increase in the consumer loans to personal income ratio

Increase in the consumer loans to personal income ratio Changes in the ratio of consumer installment credit to personal income is a lagging indicator. Changes in industrial production and hours worked are coincident indicators. Changes in raw materials orders is a leading indicator.

Which of the following is a leading indicator? A) Corporate profits B) Gross domestic product C) New orders for consumer goods D) Wages

New orders for consumer goods New orders for consumer goods is a leading indicator, foretelling future economic activity (the actual purchase of those goods). Wages and gross domestic product are coincident indicators. Corporate profits are lagging indicators.

The nation is experiencing a rapid increase in the cost of living, but wages are not keeping pace with the increase in cost. The nation is experiencing A) stagflation. B) inflation. C) stagnation. D) disinflation.

stagflation.

The economy is showing that employment is low, there is little consumer demand, and loans for expansion and retooling are way down, showing a lack of business activity. Yet prices for consumer goods are still rising. Economists would call this a period of A) inflation. B) deflation. C) stagnation. D) stagflation.

stagflation. Inflation is characterized by a rise in prices for goods and services. Stagnation is characterized by high unemployment and lack of growth and business activity. When these occur simultaneously, economists refer to these times as periods of stagflation.