Bloomberg Market Concepts Answers
Bloomberg Market Concepts (BMC) is an essential resource for anyone involved in the financial markets. Whether you’re a
student, a professional, or an enthusiast, understanding BMC is crucial for making informed decisions.
Economic Indicators
The Primacy of GDP
Knowledge Check 1
How accurately do GDP statistics portray the economy and why?
Answer: Inaccurately because the scope of GDP measurements can change..
Knowledge Check 2
Consider the formula GDP = C + I + (X-M). A country is undergoing a boom in consumption of domestic and foreign
luxury goods. In one year, the dollar growth in imports is greater than the dollar growth in domestic consumption.
Assuming nothing else has changed, what happened to GDP?
Answer: It went down.
Knowledge Check 3
Here is the most important economic data for Australia and Sweden. Which economy did better year-over-year (YOY) in
the fourth quarter of 2013 compared to the fourth quarter of 2012? Use the two charts to investigate.
Answer: Sweden performed better.
Knowledge Check 4
In the US, why is there a strong correlation between unemployment and GDP?
Answer: Consumer spending accounts for two-thirds of the U.S. economy. When the number of unemployed consumers rises,
there is less consumer spending.
Section Quiz Answers
Question Statement Answer
Here is a chart showing both nominal GDP growth and real GDP growth for a. The country has deflation. The
1. Chart
a country. Which of the following can be a true statement at the time the bottom line is nominal growth and
Interpretation:
chart was captured? the top line is real growth.
2. Leading
Economic Which of the following lines is the best leading economic factor? a. PMI
Indicator:
The “misery index” is often cited in the media as a way to measure
3. Misery Index: consumer pain. It is defined as the inflation rate plus the unemployment a. Argentina
rate. Review and identify the country with the highest “misery index.”
, Question Statement Answer
a. Nonfarm payrolls go DOWN, the
4. Recession What typically happens to nonfarm payrolls, the PMI indicator, and
PMI indicator goes DOWN, the
Indicators: housing starts at the onset of a recession in the United States?
housing starts goes DOWN.
Monitoring GDP
Question Statement Answer
1. Investor Which of the following qualities of economic indicators do
a. Timeliness of release.
Preference: investors prize the most?
Why is the release of GDP statistics less interesting to investors a. Because GDP statistics are released well
2. GDP Interest:
than the release of other economic indicators? after other economic indicators.
3. Quarterly Which of the following important U.S. economic indicators is
a. GDP
Indicator: only available on a quarterly basis?
4. Unemployment Which economic indicator is most directly linked to
a. Nonfarm payrolls.
Indicator: unemployment?
Forecasting GDP
Knowledge Check 1
Here is the economic calendar for the UK for August 2013. Examine indicators like PMI, house prices, industrial
production, employment, retail sales, and GDP. Based on these major indicators, how did the UK economy perform
overall?
Answer: Above Expectations.
Knowledge Check 2
This chart was captured in mid-2014. At that point in time, which of the following terms would have described the
growth in the Chinese economy predicted in this pop-out table?
Answer: Deceleration.
Knowledge Check 3
How have economic forecasts for this economy evolved?
Answer: Minimal change.
SECTION QUIZ
Question Statement Answer
1. Analyst These charts show data for four countries as of early 2016. For each country, the purple
line denotes historic real GDP growth. The white line denotes the consensus estimated a. RUSSIA
Consensus:
real GDP growth. The red line denotes the most pessimistic analyst forecast. The green
Bloomberg Market Concepts (BMC) is an essential resource for anyone involved in the financial markets. Whether you’re a
student, a professional, or an enthusiast, understanding BMC is crucial for making informed decisions.
Economic Indicators
The Primacy of GDP
Knowledge Check 1
How accurately do GDP statistics portray the economy and why?
Answer: Inaccurately because the scope of GDP measurements can change..
Knowledge Check 2
Consider the formula GDP = C + I + (X-M). A country is undergoing a boom in consumption of domestic and foreign
luxury goods. In one year, the dollar growth in imports is greater than the dollar growth in domestic consumption.
Assuming nothing else has changed, what happened to GDP?
Answer: It went down.
Knowledge Check 3
Here is the most important economic data for Australia and Sweden. Which economy did better year-over-year (YOY) in
the fourth quarter of 2013 compared to the fourth quarter of 2012? Use the two charts to investigate.
Answer: Sweden performed better.
Knowledge Check 4
In the US, why is there a strong correlation between unemployment and GDP?
Answer: Consumer spending accounts for two-thirds of the U.S. economy. When the number of unemployed consumers rises,
there is less consumer spending.
Section Quiz Answers
Question Statement Answer
Here is a chart showing both nominal GDP growth and real GDP growth for a. The country has deflation. The
1. Chart
a country. Which of the following can be a true statement at the time the bottom line is nominal growth and
Interpretation:
chart was captured? the top line is real growth.
2. Leading
Economic Which of the following lines is the best leading economic factor? a. PMI
Indicator:
The “misery index” is often cited in the media as a way to measure
3. Misery Index: consumer pain. It is defined as the inflation rate plus the unemployment a. Argentina
rate. Review and identify the country with the highest “misery index.”
, Question Statement Answer
a. Nonfarm payrolls go DOWN, the
4. Recession What typically happens to nonfarm payrolls, the PMI indicator, and
PMI indicator goes DOWN, the
Indicators: housing starts at the onset of a recession in the United States?
housing starts goes DOWN.
Monitoring GDP
Question Statement Answer
1. Investor Which of the following qualities of economic indicators do
a. Timeliness of release.
Preference: investors prize the most?
Why is the release of GDP statistics less interesting to investors a. Because GDP statistics are released well
2. GDP Interest:
than the release of other economic indicators? after other economic indicators.
3. Quarterly Which of the following important U.S. economic indicators is
a. GDP
Indicator: only available on a quarterly basis?
4. Unemployment Which economic indicator is most directly linked to
a. Nonfarm payrolls.
Indicator: unemployment?
Forecasting GDP
Knowledge Check 1
Here is the economic calendar for the UK for August 2013. Examine indicators like PMI, house prices, industrial
production, employment, retail sales, and GDP. Based on these major indicators, how did the UK economy perform
overall?
Answer: Above Expectations.
Knowledge Check 2
This chart was captured in mid-2014. At that point in time, which of the following terms would have described the
growth in the Chinese economy predicted in this pop-out table?
Answer: Deceleration.
Knowledge Check 3
How have economic forecasts for this economy evolved?
Answer: Minimal change.
SECTION QUIZ
Question Statement Answer
1. Analyst These charts show data for four countries as of early 2016. For each country, the purple
line denotes historic real GDP growth. The white line denotes the consensus estimated a. RUSSIA
Consensus:
real GDP growth. The red line denotes the most pessimistic analyst forecast. The green
