Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

65 Final Prep > Economics > Flashcards

Economics Flashcards

1
Q

Which school of economists encourages a government to spend money to move the economy into an expansionary phase?

A

Keynesian

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

According to the _________ Economic Theory, production & economic growth are stimulated by…

A
  • Increased government borrowing

- Increased government spending

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

The belief that the economy & inflation are best controlled through the management of the money supply rather than thru fiscal policy stimulation.

A

Monetarist Theory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Technical Analysis…

A
  • Tries to identify & predict changes in the market
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Inflation Risk…

A

the uncertainty that an investors purchasing power will decrease due to the shrinking value of the currency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Anchoring bias…

A

when people tend to base their decisions on reference points that are often arbitrarily chosen

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Weak Form EMT

A
  • states that prices reflect all past publicly available information, but that this has no validity for predicting future price movements
  • implies that technical analysis is useless to improve returns, but fundamental analysis still has potential value
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Inflation & Interest Rates generally decline during..

A

recessionary periods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Semi-Strong Form EMT

A
  • States that prices respond rapidly to publicly available information, so that no potential gains can be made by trading on that information
  • Implies that anyone with insider information has an inherent advantage & can profit by trading on it

(Most investors subscribe to this)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Monetarist theory states that the economy is stimulated by…

A

the actions of the Federal Reserve

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

To stimulate the economy using Fiscal Policy, what actions could be taken?

A
  • reduce tax rates

- increased government spending

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Head & shoulders bottom formation

A
  • bullish
  • market has bottomed out & is now moving back upwards
  • reverse downtrend
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Fundamentalists would want to know…

A

earnings potential & risks associated with a particular firm

  • entire economy view
  • company’s industry
  • financial statements
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Market indicators used by contrarians?

A
  • short interest level
  • level of odd lot sales v. purchases
  • put/call ratio
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Bottom Up Analysis

A

starts by attempting to find superior performing companies, regardless of the industry

those analysts believe that these companies will provide attractive returns even if they are in an industry sector that is in a negative position in the economic cycle

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Which industries are typically affected by a recession?

A
  • durable goods

- capital goods

17
Q

If the U.S. dollar is devalued relative to other world currencies,

  1. US exports will be…
    &
  2. Foreign imports will be…
A
  1. US exports will be more competitive overseas

2. Foreign imports will be less competitive with ours

18
Q

Recession

A

two consecutive quarters of economic decline

19
Q

Fundamental Analysis

A

attempts to value stock by examining general economic conditions & growth prospects

20
Q

How is core CPI different from normal CPI?

A

Core CPI excludes food & energy prices

21
Q

What kind of economic indicator is the Prime Interest Rate?

A

lagging

22
Q

The Prime Rate is set by…

A

the banks

23
Q

The Fed controls…

A
  • the reserve requirements
  • the activities of the Federal Open Market Committee
  • the discount rate
24
Q

Corporations long-term liabilities?

A

remaining interest payments

25
Q

What type of assets hedge against inflation?

A

Tangible assets

Commodities, real estate

26
Q

Net worth formula?

A

Assets - Liabilities = Net Worth

27
Q

Customer Cash Flow Statement

A

Anything that goes in - comes out on a monthly basis

In:

  • Salary
  • Investment Income
  • Rental Income

Out:

  • CC Bills
  • Debt
  • Tax
  • Mortgage
28
Q

Strong form EMT

A

States that prices respond rapidly to both publicly available & private information, so that no one can profit by trading on this information

29
Q

Efficient Market Theory (EMT)

A

The belief that all information about an issuer is available to all participants in the market at the same time & that prices of securities directly reflect investor expectations based on this information

30
Q

Technical Analysts would want to know…

A
  • market statistics indicative of future buying
  • market statistics that could reflect price or market trends
  • trading volume
  • short interest ratio
  • trend lines
  • advance/decline line
31
Q

Country A develops a new product that is in high demand around the world. The likely effect of this would be…

A

When exports exceed imports (the likely case here), it leads to a trade surplus.

Invariably, that causes a positive balance of payments, which has the tendency to increase the value of that country’s currency relative to others.

There is no way to know how this new product will impact the tax legislation of Country A.

32
Q

The contraction phase is characterized by…

A
  • business sales falling
  • unemployment increasing
  • gross domestic product (GDP) growth falling.

65 Final Prep (8 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions