FIN 431: CH.17-19 Flashcards
Research to predict stock value that focuses on such determinants as earnings and dividends prospects, expectations for future interest rates, and risk evaluation of the firm
fundamental analysis
Price of a unit of one country’s currency in terms of another country’s currency.
exchange rate
The market value of goods and services produced over time including the income of foreign corporations and foreign residents working in the United States, but excluding the income of U.S. residents and corporations overseas.
gross domestic product
The ratio of the number of people classified as unemployed to the total labor force.
unemployment rate
The amount by which government spending exceeds government revenues.
budget deficit
Actions taken by the Board of Governors of the Federal Reserve System to influence the money supply or interest rates.
monetary policy
The transition point between recession and recovery
trough
An event that affects the demand for goods and services in the economy.
demand shock
An event that influences production capacity and costs in the economy.
supply shock
The use of government spending and taxing for the specific purpose of stabilizing the economy.
fiscal policy
Repetitive cycles of recession and recovery.
business cycle
The transition from the end of an expansion to the start of a contraction.
peak
Industries with above-average sensitivity to the state of the economy.
cyclical industries
Industries with little sensitivity to the state of the economy.
defensive industries
Economic series that tend to rise or fall in advance of the rest of the economy.
leading economic indicators
