BF Unit 5 Practice Test

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

• efficient

• influential

• successful

• volatile

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

• by avoiding investment scams

• by encouraging product purchases

• by discouraging product purchases

• by promoting well-performing funds

What do bond yields typically do during an economic expansion?

• increase

• drop to near zero

• gradually decrease

• remain unchanged

Businesses purchasing items for resale are exempt from sales tax. This helps to prevent what problem when measuring the GDP?

• double counting

• recording bartering

• underground economy

• secondhand transactions

When consumer purchasing power decreases, the economy will experience a period of:

• containment

• contraction

• emergence

• expansion

If a bank doubles its interest rates on loans, the demand for money will:

• triple

• decrease

• remain the same

• continue to increase

Online chat forums and other online communities that enable businesses to learn about the wants and needs of their worldwide target market have created a new form of:

• gender roles

• class systems

• cultural values

• social relationships

This year’s nominal GDP is higher than last year’s even though production stayed the same. The higher GDP figure is the result of:

• inflation

• a trade deficit

• unemployment

• increased imports

A country's central bank issues too much currency given the size of its economy. The country's business sector is unable to meet the excess demand caused by the increased amount of currency in circulation. As a result:

• prices will go up and inflation will result.

• prices will go down and deflation will result.

• buying power will go up and inflation will result.

• buying power will go down and deflation will result.

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

• increases.

• decreases.

• stays the same.

• fluctuates daily.