BLOOMBERG MARKET CONCEPTS TEST
PAPER QUESTIONS AND SOLUTIONS
FULLY UPDATED
●● What is the difference between real GDP and nominal GDP?
Answer: Nominal GDP uses current prices, not adjusted for inflation,
while real GDP adjusts for inflation using a base year.
●● What are the four components of GDP?
Answer: Consumption (C), Investment (I), Government spending (G),
and Net Exports (X-M).
●● What is a leading economic indicator?
Answer: A variable that changes before the economy shifts, used to
predict future activity.
●● What is a lagging economic indicator?
Answer: A variable that changes after the economy has already shifted.
●● What is a coincident indicator?
Answer: An indicator that moves in line with the overall economy in real
time.
, ●● What is the Consumer Price Index (CPI)?
Answer: Measures the average change in prices paid by consumers for a
basket of goods and services.
●● What is core CPI?
Answer: CPI excluding food and energy prices, providing a clearer read
on underlying inflation trends.
●● What is the Producer Price Index (PPI)?
Answer: Measures average prices received by domestic producers for
their output.
●● What is the unemployment rate?
Answer: The percentage of the labor force that is jobless and actively
seeking employment.
●● What is the labor force participation rate?
Answer: The percentage of the working-age population either employed
or actively looking for work.
●● What is a recession?
Answer: Commonly defined as two consecutive quarters of negative real
GDP growth.
PAPER QUESTIONS AND SOLUTIONS
FULLY UPDATED
●● What is the difference between real GDP and nominal GDP?
Answer: Nominal GDP uses current prices, not adjusted for inflation,
while real GDP adjusts for inflation using a base year.
●● What are the four components of GDP?
Answer: Consumption (C), Investment (I), Government spending (G),
and Net Exports (X-M).
●● What is a leading economic indicator?
Answer: A variable that changes before the economy shifts, used to
predict future activity.
●● What is a lagging economic indicator?
Answer: A variable that changes after the economy has already shifted.
●● What is a coincident indicator?
Answer: An indicator that moves in line with the overall economy in real
time.
, ●● What is the Consumer Price Index (CPI)?
Answer: Measures the average change in prices paid by consumers for a
basket of goods and services.
●● What is core CPI?
Answer: CPI excluding food and energy prices, providing a clearer read
on underlying inflation trends.
●● What is the Producer Price Index (PPI)?
Answer: Measures average prices received by domestic producers for
their output.
●● What is the unemployment rate?
Answer: The percentage of the labor force that is jobless and actively
seeking employment.
●● What is the labor force participation rate?
Answer: The percentage of the working-age population either employed
or actively looking for work.
●● What is a recession?
Answer: Commonly defined as two consecutive quarters of negative real
GDP growth.
