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Exam 12: Macroeconomic and Industry Analysis

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Question 21

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An industry analysis for manufacturers of a small personal care gadget observed the following characteristics: 1) Industry sales have grown at 15%-20% per year in recent years and are expected to grow at 10%-15% per year over the next 3 years, still well above the economic growth rate. 2) Some U.S. manufacturers are attempting to enter fast-growing non-U.S. markets, which remain largely unexploited. 3) Some manufacturers have created a new niche in the industry by selling directly to customers through mail order. Sales for this industry segment are growing at 40% per year. 4) The current penetration rate in the United States is 60% of households and will be difficult to increase. 5) Manufacturers compete fiercely on the basis of price, and price wars within the industry are common. 6) Some manufacturers are able to develop new, unexploited niche markets in the United States based on company reputation, quality, and service. 7) Several manufacturers have recently merged, and it is expected that consolidation in the industry will increase. 8) New manufacturers continue to enter the market. Characteristics 4 and 5 would indicate that the industry is in the ________ stage.

A) start-up
B) consolidation
C) maturity
D) relative decline

E) A) and D)
F) None of the above

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Question 22

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The supply of funds in the economy is controlled primarily by ________.

A) the Federal Reserve System
B) Congress
C) money center banks
D) the Treasury department

E) A) and D)
F) A) and C)

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Question 23

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Which one of the following is probably the most direct and immediate way to stimulate or slow the economy, although it is not very useful for fine-tuning economic performance?

The classification system used to classify firms into industries is now called the ________ code.

To obtain an approximate estimate of the real interest rate, one must ________ the ________ the nominal risk-free rate.

Which one of the following is not a demand shock?

In 1980 the dollar-yen exchange rate was about $.0045. In 2017 the yen-dollar exchange rate was about 91 yen per dollar. A Japanese producer would have had to increase the dollar price of a good sold in the United States by approximately ________ to maintain the same yen price in 2017.

The Conference Board's Consumer Confidence Index is released ________.

You would expect the beta of cyclical industries to be ________ and the beta of defensive industries to be ________.

The expansion of the money supply at a rate that exceeds the increase in goods and services will likely result in ________.

Whenever OPEC attempts to influence the price of oil by significantly altering production, economists refer to this type of event as a ________.

Order the following stages in the industry life cycle from the earliest to latest to occur after the start-up phase: I. Maturity II. Relative decline III. Consolidation

Which of the following is not an example of fiscal policy?

The fed funds rate is the ________.

Members of the Board of Governors of the Federal Reserve System are appointed by ________ to serve ________ terms.

The analysis of the determinants of firm value is called ________.

The goal of supply-side policies is to ________.

Portfolio manager Peter Lynch would classify Coca-Cola as ________.

An increase in the value of the yen against the U.S. dollar can cause the Japanese automaker Toyota to either ________ on its U.S. sales.

If you are going to earn abnormal returns based on your macroeconomic analysis, it will most likely have to be because ________.