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Exam 12: Macroeconomic and Industry Analysis

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Question 21

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Which of the following are examples of cyclical industries? I. Maytag II. Computer chip manufacturers III. Kellogg's Frosted Flakes IV. Pfizer

A) I and II only
B) I, II and III only
C) II, III and IV only
D) I, II, III and IV

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

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Question 22

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The share price index and contracts and orders for non-defence capital goods are ________.

A) leading economic indicators
B) coincidental economic indicators
C) lagging economic indicators
D) leading and coincidental indicators respectively

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

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Question 23

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If the currency of your country is depreciating, this should ________ exports and ________ imports.

If interest rates increase, business investment expenditures are likely to ________ and consumer durable expenditures are likely to ________.

Supply-side economics tends to focus on ________.

According to ________ economists, the growth of the US economy in the 1980s can be attributed to lower marginal tax rates which improved the incentives for people to work.

________ in interest rates are associated with share market declines.

Which of the following industries would most analysts classify as mature?

Increases in the money supply will cause demand for investment and consumption goods to ________ in the short run and may cause prices to ________ in the long run.

What economic variable is most closely associated with increasing corporate profits?

Assume that the Reserve Bank increases the money supply. This will cause ________. I. interest rates to decrease II. consumption and investment to decrease III. inflation to fall

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

Everything else equal, an increase in the government budget deficit would ________. i. increase the government's demand for funds II. shift the demand curve for funds to the left III. increase the interest rate in the economy

Order the following stages that occur after the start-up phase in the industry life cycle from earliest to latest: I. maturity II. relative decline III. consolidation

Cash cows are typically found in the ________ stage of the industry life cycle.

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

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

Firm B produces gadgets. The price of gadgets is $2 each. Firm B has total fixed costs of $300 000 and variable costs of $1.40 per gadget. The corporate tax rate is 40%. What is the break-even number of gadgets B must sell to make a zero after-tax profit?

Which of the following comprise barriers to entry? I. Large economies of scale required to be profitable II. Established brand loyalty III. Patent protection for the firm's product IV. Rapid industry growth

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 three years, still well above the economic growth rate. 2) Some US manufacturers are attempting to enter fast-growing non-US 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 US 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 US 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. Which of the characteristics would be typical of an industry that is in the maturity stage?