A Simple In-Class Quiz on Day 2 Presentation 15 Multiple Choice Questions with Answers

____#1. What best describes Taiwan YoY annual economic growth for the past few quarters. a. steadily rising from 1% to 3% b. steadily falling from 3% to 1% c. stable at roughly – 0.50% d. stable at roughly 0.50%

#1. Answer: (b) is best choice

____#2. YoY and QoQ growth in Taiwan differs substantially. This is because a. YoY is correct and QoQ is much more imprecise b. QoQ will always show improvement c. the economy fell shortly, but now is turning around d. the two will become equal after appropriate revisions

#2. Answer: (c) is best choice YoY QoQ #2. Answer: (c) is best choice

a. True b. False c. Impossible to Tell ____#3. From 2013 – 2015 government current expenditures in Taiwan have been a very important factor in supporting growth. a. True b. False c. Impossible to Tell

#3. Answer: (b) is best choice

____#4. The “Red Supply Chain” refers to a. Taiwan supply imports stopping (red) b. (red) China beginning import substitution policies c. A particularly well functioning supply chain d. The supply chain to the US and EA (red hot)

____#5. Which of the following is TRUE? a. The population in Taiwan has begun to decrease b. Taiwan's TFR was lower in the 1950s than now c. Taiwan needs a TFR of 2.1 to have stable population d. Taiwan 's TFR is higher than Japan’s

Country TFR 2014 Bosnia-Herzegovina 1.2 Hong Kong SAR South Korea MacaoSAR Portugal Taiwan Andorra 1.3 Greece Moldova Poland Romania Singapore Spain Cyprus 1.4 Germany Hungary Italy Japan Malta

____#6. Long run production of real GDP is dependent on population growth because of the need for a. Technology and innovation b. Capital Resources c. Labor Resources d. Human Capital

Labor = Human Effort

____#7. In order to boost productivity, we need a. greater labor resources b. more money for education c. more schools d. greater investment of all types

Taiwan needs to invest for the future … Taiwan needs to invest for the future …. but how can it ensure investment will be strong?

____#8. An essential part of supply side economics is reducing a. wages b. taxes on consumption c. the total fertility rate (TFR) d. the level of risk and uncertainty faced by business

____#9. We have been defining a bubble as a. Wealth / Nominal GDP b. Stock Price / PE Ratio c. Velocity of Money d. Capital / Labor

US Wealth / GDP = B …. What I call the Bubble Source: Federal Reserve 4.4

____#10. The big problem of modern economic policy is that it is trying to stimulate the economy by a. lowering taxes b. greening the economy c. creating asset bubbles and hoping for wealth effects d. lowering the level of debt in the economy

Stockman believes we are using bubbles to try to stimulate the economy…

____#11. Secular stagnation is when potential growth of the economy is a. higher than actual growth b. lower than actual growth c. lower than the potential in the past d. higher than the potential in the past

Potential Output Growth is Falling – and not just in the US

____#12. Taiwan has very high housing prices because a. incomes are high b. government is trying to make housing affordable c. implicit currency war with the US d. increasing interest rates

____#13. The Rule of 72 tells us that if we have a growth rate of 6% it will take roughly ______ _____ to double the size of the economy a. 15 years b. 12 years c. 10 years d. 8 years

____#14. One of the benefits of OEM for Taiwan companies is that a. there are no taxes to be paid b. they can supply industries and not just a company c. they are paid a lot d. they can remain small and be efficient

Flexibility

____#15. The big question for Taiwan is a. will the "Go South" program work b. will the US defend Taiwan in a war c. how can Taiwan best deal with China d. can Taiwan successfully beat China's economy