2024 Bloomberg market concepts (BMC) Test 100% Correct Answers Guaranteed 1. How accurately do GDP portray the economy and why? Inaccurately because the scope of GDP measurements can change. Correct answer 2. Consider the formula GDP = C+I+G+(X -M). A country is undergoing a boom in consumption of domestic and foreign luxur y 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? It went down . Correct answer 3. what is the meaning of each letter in the GDP formula, C+I+G+(X -M). Correct answer C= Consumer spending I = Investment (Gross Fixed Capital Formation) G= Government Spending X= Exports M= Imports 4. 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. Sweden performed bet ter. Correct answer 5. In the United States, why is there a strong correlation between unemployment and GDP? Consumer spending accounts for two -thirds of the U.S. economy when the number of unemployed consumers rises, there is less consumer spending. Correct answer 6. Here is a chart showing both nominal GDP growth and real GDP growth for a country. Which of the following can be a true statement at the time the chart was captured? The country has deflation. The bottom line is nominal growth a nd the top line is real growth. Correct answer 7. Which of the following lines is the best leading econo mic indicator? PMI. Correct answer 8. What typically happens to nonfarm payrolls, the PMI indicator, and housing starts at the onset of a recession in the United States? Nonfarm payrolls go down, the PMI indicator goes DOWN, the housing starts goes down. Correct answer 9. Which of the following qualities of economic indicators do investors prize the most? Timeliness of release . Correct answer 10. Why is the release of GDP statistics less interesting to investors than the release of other econom ic indicators? Because GDP statistics are released well after other economic indicators. Correct answer 11. Which of the following important U.S. economic indicators is only available on a quarterly basis? GDP . Correct answer 12. Which economic indicator is most directly linked to unemployment? nonfarm payrolls . Correct answer 13. What is the main reason that investment banks create estimates of economic indicators? To know when specific economic data points are a positive or negative surprise. Correct answer 14. Which of the following is the biggest pitfall of economic indicators? They do not consistentl y presage turning points. Correct answer 15. Which country is the fourth biggest importer and exporter? Japan . Correct answer 16. Which of the following is not an example of a failed peg? Hong Kong dollar against the U.S. dollar in 1997. Correct answer 17. What generally happens when a central bank unexpectedly increases interest rates? The currency strengthens. Correct answer 18. Which driver weakened the Swiss franc? A surprise change in inflation expectations . Correct answer 19. What does the Big Mac index show? How cur rencies may be overvalued or undervalued. Correct answer 20. Which of the following are short -term drivers of currency valuation? Surprise changes in interest rates, inflation, and trade. Correct answer 21. By what mechanism do interest rates affect currency values? Global investors are attracted by higher bond yields in high interest rate countries. Correct answer
over -year (YOY) in the fourth quarter of 2013 compared to the fourth quarter of 2012? Use the two charts to investigate. Sweden performed bet ter. Correct answer 5. In the United States, why is there a strong correlation between unemployment and GDP? Consumer spending accounts for two -thirds of the U.S. economy when the number of unemployed consumers rises, there is less consumer spending. Correct answer 6. Here is a chart showing both nominal GDP growth and real GDP growth for a country. Which of the following can be a true statement at the time the chart was captured? The country has deflation. The bottom line is nominal growth a nd the top line is real growth. Correct answer 7. Which of the following lines is the best leading econo mic indicator? PMI. Correct answer 8. What typically happens to nonfarm payrolls, the PMI indicator, and housing starts at the onset of a recession in the United States? Nonfarm payrolls go down, the PMI indicator goes DOWN, the housing starts goes down. Correct answer 9. Which of the following qualities of economic indicators do investors prize the most? Timeliness of release . Correct answer 10. Why is the release of GDP statistics less interesting to investors than the release of other econom ic indicators? Because GDP statistics are released well after other economic indicators. Correct answer 11. Which of the following important U.S. economic indicators is only available on a quarterly basis? GDP . Correct answer 12. Which economic indicator is most directly linked to unemployment? nonfarm payrolls . Correct answer 13. What is the main reason that investment banks create estimates of economic indicators? To know when specific economic data points are a positive or negative surprise. Correct answer 14. Which of the following is the biggest pitfall of economic indicators? They do not consistentl y presage turning points. Correct answer 15. Which country is the fourth biggest importer and exporter? Japan . Correct answer 16. Which of the following is not an example of a failed peg? Hong Kong dollar against the U.S. dollar in 1997. Correct answer 17. What generally happens when a central bank unexpectedly increases interest rates? The currency strengthens. Correct answer 18. Which driver weakened the Swiss franc? A surprise change in inflation expectations . Correct answer 19. What does the Big Mac index show? How cur rencies may be overvalued or undervalued. Correct answer 20. Which of the following are short -term drivers of currency valuation? Surprise changes in interest rates, inflation, and trade. Correct answer 21. By what mechanism do interest rates affect currency values? Global investors are attracted by higher bond yields in high interest rate countries. Correct answer
