MACROECONOMIC AND INDUSTRY
ANALYSIS EXAM QUESTIONS &
ACTUAL PASSED ANSWERS
macroeconomics time - Correct Answer ✔✔ placeholder
fundamental analysis - Correct Answer ✔✔ assessment of firm value that focuses on
earnings and dividend prospects, expectations for future interest rates, and risk eval
exchange rate of currency - Correct Answer ✔✔ the price at which one currency can be
exchanged for another
global economy notes - Correct Answer ✔✔ - stock market returns do not always align
with macroeconomic performance
- obv harder for a business to succeed in a contracting economy than an expanding one
- remember that the real rate adjusts for inflation and the nominal rate is the sticker
price
- the change in the real exchange rate measures how much expensive foreign goods
have become to US citizens, accounting for both exchange rate fluctuations and
inflation differentials across countries
key indicators of the macroeconomy - Correct Answer ✔✔ - GDP
- Employment
- Inflation
- Interest rates
- Budget deficit
- Consumer sentiments
GDP - Correct Answer ✔✔ the measure of the economy's total production of goods and
services
industrial production - Correct Answer ✔✔ provides a measure of economic activity
more narrowly focused on the manufacturing side of the economy
unemployment rate - Correct Answer ✔✔ pct of total labor force (those either working or
actively seeking employment) yet to find work. measures the extent to which economy
is operating at full capacity.
, capacity utilization rate - Correct Answer ✔✔ ratio of actual output from factories to
potential output
inflation - Correct Answer ✔✔ the rate at which the general level of prices rise
- high inflation = "overheated" economies where demand for goods and services is
outstripping productive capacity, which leads to upward pressure on prices
govt inflation perception - Correct Answer ✔✔ - they hope to stimulate economies
enough to maintain nearly full employment, but not so much as to bring on inflationary
pressures
interest rate significance in macroeconomy - Correct Answer ✔✔ - high interest rates
reduce PV of FCFs, reducing attractiveness
- pay attention to real interest rates
budget deficit - Correct Answer ✔✔ the amount by which government spending
exceeds government revenues
- large government borrowing can force up interest rates
sentiment - Correct Answer ✔✔ - consumers optimism and pessimism can indicate
economy performance
demand shock - Correct Answer ✔✔ an event that affects the demand for goods and
services in the economy. shifts the aggregate demand curve
- reduction in tax rates, increases in money supply, increases in govt spending,
increases in foreign export demand
supply shock - Correct Answer ✔✔ a sudden shortage of a good. shifts the aggregate
supply curve
- changes in price of energy, natural disasters that destroy crops, changes in
educational level of economy's workforce, changes in wage rates at which labor force is
willing to work
jodido COVID notes - Correct Answer ✔✔ - disrupted supply chains made it difficult and
expensive to find either consumer or producer goods, as well as dramatic reduction in
automobile production and price increases as a result of computer chip shortages
- reduction in national workforce
COVID notes 2 - Correct Answer ✔✔ - inflation jumped from less than 2% to 8.6%
during covid. culprits:
ANALYSIS EXAM QUESTIONS &
ACTUAL PASSED ANSWERS
macroeconomics time - Correct Answer ✔✔ placeholder
fundamental analysis - Correct Answer ✔✔ assessment of firm value that focuses on
earnings and dividend prospects, expectations for future interest rates, and risk eval
exchange rate of currency - Correct Answer ✔✔ the price at which one currency can be
exchanged for another
global economy notes - Correct Answer ✔✔ - stock market returns do not always align
with macroeconomic performance
- obv harder for a business to succeed in a contracting economy than an expanding one
- remember that the real rate adjusts for inflation and the nominal rate is the sticker
price
- the change in the real exchange rate measures how much expensive foreign goods
have become to US citizens, accounting for both exchange rate fluctuations and
inflation differentials across countries
key indicators of the macroeconomy - Correct Answer ✔✔ - GDP
- Employment
- Inflation
- Interest rates
- Budget deficit
- Consumer sentiments
GDP - Correct Answer ✔✔ the measure of the economy's total production of goods and
services
industrial production - Correct Answer ✔✔ provides a measure of economic activity
more narrowly focused on the manufacturing side of the economy
unemployment rate - Correct Answer ✔✔ pct of total labor force (those either working or
actively seeking employment) yet to find work. measures the extent to which economy
is operating at full capacity.
, capacity utilization rate - Correct Answer ✔✔ ratio of actual output from factories to
potential output
inflation - Correct Answer ✔✔ the rate at which the general level of prices rise
- high inflation = "overheated" economies where demand for goods and services is
outstripping productive capacity, which leads to upward pressure on prices
govt inflation perception - Correct Answer ✔✔ - they hope to stimulate economies
enough to maintain nearly full employment, but not so much as to bring on inflationary
pressures
interest rate significance in macroeconomy - Correct Answer ✔✔ - high interest rates
reduce PV of FCFs, reducing attractiveness
- pay attention to real interest rates
budget deficit - Correct Answer ✔✔ the amount by which government spending
exceeds government revenues
- large government borrowing can force up interest rates
sentiment - Correct Answer ✔✔ - consumers optimism and pessimism can indicate
economy performance
demand shock - Correct Answer ✔✔ an event that affects the demand for goods and
services in the economy. shifts the aggregate demand curve
- reduction in tax rates, increases in money supply, increases in govt spending,
increases in foreign export demand
supply shock - Correct Answer ✔✔ a sudden shortage of a good. shifts the aggregate
supply curve
- changes in price of energy, natural disasters that destroy crops, changes in
educational level of economy's workforce, changes in wage rates at which labor force is
willing to work
jodido COVID notes - Correct Answer ✔✔ - disrupted supply chains made it difficult and
expensive to find either consumer or producer goods, as well as dramatic reduction in
automobile production and price increases as a result of computer chip shortages
- reduction in national workforce
COVID notes 2 - Correct Answer ✔✔ - inflation jumped from less than 2% to 8.6%
during covid. culprits:
