BF21 - 5.00 Understand the Impact of the Economy on Financial Decisions

Question 1

One factor that has stimulated financial globalization is the increase in:

Accepted Answer

domestic competition.

Question 2

When people invest in stocks, what primarily drives their actions?

Accepted Answer

expectations

Question 3

Ups and downs in the level of economic activity over a period of time are called a/an:

Accepted Answer

business cycle.

Question 4

At a stock exchange, specialists have responsibility for:

Accepted Answer

all of the trades made on a particular stock.

Question 5

Which is nonverbal communication that might have a different meaning elsewhere in the world

Accepted Answer

shaking hands when greeting a customer

Question 6

Some businesses sell to individuals, businesses, or governments in other countries. This is …

Accepted Answer

exporting.

Question 7

Online communities helping businesses learn about wants & needs of a worldwide market are …

Accepted Answer

a new form of social relationships.

Question 8

When the Consumer Price Index (CPI) increases sharply, stock prices usually:

Accepted Answer

fall.

Question 9

Which is a benefit of global trade?

Accepted Answer

an improved standard of living

Question 10

When an emerging market suffers an economic decline, foreign investors usually:

Accepted Answer

quickly withdraw their money from the emerging market.

Question 11

What tends to occur when a country is experiencing political instability?

Accepted Answer

Its currency loses value.

Question 12

Gross domestic product that has been adjusted for inflation is known as:

Accepted Answer

real GDP.

Question 13

The most likely result of institutional investors buying shares of a company's stock is

Accepted Answer

Individual investors purchase shares of stock in the company

Question 14

A country can often produce goods more inexpensively than other nations because it:

Accepted Answer

has easy access to raw materials.

Question 15

What kind of order do you place to buy a stock only when the price drops to a certain amount?

Accepted Answer

limit

Question 16

A decline in the financial markets can be caused by:

Accepted Answer

higher unemployment.

Question 17

What type of order restriction means the order will expire at the end of the trading day?

Accepted Answer

day order

Question 18

If a country exported more goods and services, than it imported, this is a:

Accepted Answer

trade surplus.

Question 19

Which will occur if the U.S. dollar increases in value?

Accepted Answer

Imports will increase.

Question 20

In calculating GDP, economists try to avoid double counting because it would:

Accepted Answer

inflate the value of GDP.

Question 21

This year’s nominal GDP is higher than last year’s even though production stayed the same. Why?

Accepted Answer

inflation.

Question 22

What do bond yields typically do during an economic expansion?

Accepted Answer

increase

Question 23

A cultural & social characteristic could affect businesses that trade with some other countries

Accepted Answer

role of women

Question 24

How can the general state of the economy affect a stock's price?

Accepted Answer

by increasing supply or demand

Question 25

Falling interest rates typically cause:

Accepted Answer

stock prices to increase.

Question 26

Why might some nations be dependent on other nations?

Accepted Answer

unequal distribution of resources

Question 27

The period of time during the business cycle when production and employment increase is

Accepted Answer

expansion.

Question 28

A factor that contributed to financial globalization was the shift of developed countries from:

Accepted Answer

fixed exchange rates to floating exchange rates.

Question 29

When one country can produce goods at a relatively more efficient rate than another, this is a…

Accepted Answer

comparative advantage

Question 30

What is the difference between a stock’s ask price and buy price?

Accepted Answer

Ask price is the sell price, buy price is the bid price.

Question 31

If one country produces products faster and more cheaply than another, this is …

Accepted Answer

an absolute advantage

Question 32

Japan and the U.S. buy and sell each other’s goods and services. This is an example of:

Accepted Answer

global trade.

Question 33

How does a bull market affect a stock's price?

Accepted Answer

by encouraging product purchases

Question 34

Stocks whose prices rise higher, or fall lower, than the market as a whole are referred to as:

Accepted Answer

volatile.

Question 35

Which is a company-specific influence on a stock price?

Accepted Answer

change in management

Question 36

When nominal gross domestic product (GNP) rises, the money supply typically:

Accepted Answer

increases.

BF21 - 5.00 Understand the Impact of the Economy on Financial Decisions

Questions 36

BF21 - 5.00 Understand the Impact of the Economy on Financial Decisions

Questions 36