QuestionQuestion 1The forecasting technique which attempts to forecast sho

Question 1

The forecasting technique which attempts to forecast short-run changes and makes use of economic indicators known as leading, coincident or lagging indicators is known as:

econometric technique

time-series forecasting

opinion polling

barometric technique

judgment forecasting

Question 2

If two alternative economic models are offered, other things equal, we would

tend to pick the one with the lowest R2.

select the model that is the most expensive to estimate.

pick the model that was the most complex.

select the model that gave the most accurate forecasts

Question 3

The variation in an economic time-series which is caused by major expansions or contractions usually of greater than a year in duration is known as:

secular trend

cyclical variation

seasonal effect

unpredictable random factor

Question 4

Consumer expenditure plans is an example of a forecasting method. Which of the general categories best described this example?

time-series forecasting techniques

barometric techniques

survey techniques and opinion polling

econometric techniques

input-output analysis

Question 5

The type of economic indicator that can best be used for business forecasting is the:

leading indicator

coincident indicator

lagging indicator

current business inventory indicator

optimism/pessimism indicator

Question 6

The use of quarterly data to develop the forecasting model Yt = a +bYt?1 is an example of which forecasting technique?

Barometric forecasting

Time-series forecasting

Survey and opinion

Econometric methods based on an understanding of the underlying economic variables involved

Input-output analysis

Question 7

Purchasing power parity or PPP says the ratios composed of:

interest rates explain the direction of exchange rates.

growth rates explain the direction of exchange rates.

inflation rates explain the direction of exchange rates.

services explain the direction exchange rates.

public opinion polls explain the direction of exchange rates.

Question 8

If Ben Bernanke, Chair of the Federal Reserve Board, begins to tighten monetary policy by raising US interest rates next year, what is the likely impact on the value of the dollar?

The value of the dollar falls when US interest rates rise.

The value of the dollar rises when US interest rates rise.

The value of the dollar is not related to US interest rates.

This is known as Purchasing Power Parity or PPP.

Question 9

If the British pound (?) appreciates by 10% against the dollar:

both the US importers from Britain and US exporters to Britain will be helped by the appreciating pound.

the US exporters will find it harder to sell to foreign customers in Britain.

the US importer of British goods will tend to find that their cost of goods rises, hurting its bottom line.

both US importers of British goods and exporters to Britain will be unaffected by changes in foreign exchange rates.

Question 10

Trading partners should specialize in producing goods in accordance with comparative advantage, then trade and diversify in consumption because

out-of-pocket costs of production decline

free trade areas protect infant industries

economies of scale are present

manufacturers face diminishing returns

more goods are available for consumption

Question 11

Using demand and supply curves for the Japanese yen based on the $/¥ price for yen, an increase in US INFLATION RATES would

Decrease the demand for yen and decrease the supply of the yen.

Increase the demand for yen and decrease the supply of the yen.

Increase the demand and increase the supply of yen.

Decrease both the supply and the demand of yen.

Have no impact on the demand or supply of the yen.

Question 12

An increase in the exchange rate of the U.S. dollar relative to a trading partner can result from

higher anticipated costs of production in the U.S.

higher interest rates and higher inflation in the U.S.

higher growth rates in the trading partner’s economy

a change in the terms of trade

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