投资学第7版TestBank答案17Word下载.docx

1、 D） A and B E） B and C A Difficulty: Rationale: Consumer durables, such as automobiles, are highly cyclical as purchases can be delayed until good times. Necessities, low-ticket items, and addictive products are purchased in good times and bad. 3. Demand-side economics is concerned with _. A） govern

2、ment spending and tax levels B） monetary policy C） fiscal policy E） A, B, and C E Difficulty: Demand-side economics is concerned with monetary and fiscal policy （government spending and taxing）. 4. The most widely used monetary tool is _. A） altering the discount rate B） altering the reserve require

3、ments C） open market operations D） altering marginal tax rates E） none of the above C Difficulty: The Federal Reserves open market operations are the most widely used and most effective monetary tool for influencing interest rates. 5. The real, or inflation-adjusted, exchange rate, is A） the balance

4、 of trade. B） the budget deficit. C） the purchasing power ratio. D） unimportant to the U. S economy. E） none of the above. The ratio of one countrys purchasing power to anothers is called the , or inflation adjusted, exchange rate, and is an important measure of the relative costs of domestic versus

5、 foreign goods. 6. The normal range of price-earnings ratios for the S&P500 Index is A） between 2 and 10. B） between 5 and 15. C） less than 8. D） between 12 and 25 E） greater than 20. Moderate Stock prices commonly trade at between 12 and 25 times earnings. 7. Monetary policy is determined by A） gov

6、ernment budget decisions. B） presidential mandates. C） the board of Governors of the Federal Reserve System. D） congressional actions. The Board of Governors of the Federal Reserve System determines monetary policy through open market operations, changes in the discount rate and reserve requirement

7、adjustments. 8. A trough is _. A） a transition from an expansion in the business cycle to the start of a contraction B） a transition from a contraction in the business cycle to the start of an expansion C） a depression that lasts more than three years. D） only something used by farmers to feed pigs

8、and not an investment term B Difficulty: The trough occurs when the economy has hit rock bottom in the business cycle and recovery is ahead. 9. A peak is _. The peak occurs when the economy has hit the top in the business cycle. 10. If the economy is growing, firms with high operating leverage will

9、experience _. A） higher increases in profits than firms with low operating leverage. B） similar increases in profits as firms with low operating leverage. C） smaller increases in profits than firms with low operating leverage. D） no change in profits. As sales increase, firms with high operating lev

10、erage spread these fixed costs over more units and thus increase profits. 11. If the economy is shrinking, firms with high operating leverage will experience _. A） higher decreases in profits than firms with low operating leverage. B） similar decreases in profits as firms with low operating leverage

11、. C） smaller decreases in profits than firms with low operating leverage. As sales decrease, firms with high operating leverage spread these fixed costs over fewer units and thus decrease profits. 12. If the economy is growing, firms with low operating leverage will experience _. A） higher increases

12、 in profits than firms with high operating leverage. B） similar increases in profits as firms with high operating leverage. C） smaller increases in profits than firms with high operating leverage. 13. If the economy is shrinking, firms with low operating leverage will experience _. A） higher decreas

13、es in profits than firms with high operating leverage. B） similar decreases in profits as firms with high operating leverage. C） smaller decreases in profits than firms with high operating leverage. 14. GDP refers to _. A） the amount of personal disposable income in the economy. B） the difference be

14、tween government spending and government revenues. C） the total manufacturing output in the economy. D） the total production of goods and services in the economy GDP is a measure of the productive output of the country, both in terms of goods and services. 15. The average duration of unemployment an

15、d changes in the consumer price index for services are_. A） leading economic indicators B） coincidental economic indicators C） lagging economic indicators D） composite economic indicators These indicators （C） lag the general economy, and are indicators that the economy is about to change directions.

16、 16. A firm in an industry that is very sensitive to the business cycle will likely have a stock beta _. A） greater than 1.0 B） equal to 1.0 C） less than 1.0 but greater than 0.0 D） equal to or less than 0.0 E） There is no relationship between beta and sensitivity to the business cycle. Cyclical sto

17、cks are more volatile than the market in general, and thus have betas greater than 1.0. 17. If the economy were going into a recession, an attractive industry to invest in would be the _ industry. A） automobile B） medical services C） construction D） A and C Medical services are necessities, and thus

18、 perform about the same regardless of the business cycle. Automobile and construction industries are cyclical, and perform poorly during recessions. 18. The stock price index and contracts and new orders for nondefense capital goods are A） leading economic indicators. B） coincidental economic indica

19、tors. C） lagging economic indicators. D） not useful as economic indicators. Contracts and orders for plant and equipment are indicative of future economic times, and thus are leading economic indicators. The stock price index is one of the best leading economic indicators, a reflection of market eff

20、iciency. 19. A firm in the early stages of the industry life cycle will likely have _. A） high market penetration. B） high risk. C） rapid growth In the early stages of the industry life cycle, the firm is likely to be high in risk. 20. Assume the U. S. government was to decide to increase the budget

21、 deficit. This action will most likely cause _ to increase A） interest rates B） government borrowing C） unemployment D） both A and B Increasing the deficit raises government borrowing, increases the demand for funds and thus increases the interest rates. Deficit spending is also used to stimulate th

22、e economy by encouraging increasing the output of economy. 21. Assume the U. S. government was to decide to decrease the budget deficit. This action will most likely cause _ to decrease decreasing the deficit lowers government borrowing, decreases the demand for funds and thus decreases the interest

23、 rates. 22. Assume that the Federal Reserve decreases the money supply. This action will cause _ to decrease. B） the unemployment rate C） investment in the economy D） trade balance Decreasing the money supply is an economic contraction strategy, resulting in a decreased output of the economy. 23. If the currency of your country is depreciating, the result should be to _ exports and to _ imports. A） stimulate, stimulate B） stimulate, discourage C） discourage, stimulate D） discourage, discourage E） not affect, not affect Moderate