20 Multiple Choice Questions with Answers A Simple In-Class Quiz Day 1 Presentation 20 Multiple Choice Questions with Answers

_____ #1. The four main economic regions (US, Euro Area, Japan, and China) taken together are about ______ of the world economy, based on PPP values. a. 30% b. 50% c. 70% d. 80%

Using the EU (which includes the UK and other countries not in the Euro Area) we find that the percentage is 56% according to the IMF 2016 estimates. Thus, the figure 50% is the best choice here. #1. Answer: (b) is best choice

____ #2. Which of the following best characterizes US growth over the few quarters?   a. stable growth at 2% YoY b. rising growth at over 2.5% c. falling growth at around 1.5% d. choppy growth going up and down from 4% to 1%

#2. Answer: (a) is the best choice

____#3. Recently, what are the long and short run potential growth rates, respectively, in the US ?   a. 1.5% 2.5% b. 2.0% 1.6% c. 2.0% 2.0% d. 1.6% 1.6%

#3. Answer: (b) is the best choice

____#4. US YoY inflation has been   a. right on the Fed’s 2% target b. negative with falling prices c. very unstable ranging from 5% to as low as -1% d. very stable at about 1%

#4. Answer: (d) is the best choice

____#5. The US Federal Government Deficit to GDP ratio was -12% in 2009, but there is “fiscal space” now since the ratio is currently ______.   a. 2.5% b. 4.8% c. 7.2% d. 8.1%

#5. Answer: (a) is the best choice

____#6. Which of the following best describes annual YoY growth in the Euro Area for the past couple of years? a. very fast growth above 3% per year b. choppy growth ranging from 2.5% to -1% c. declining growth around 1.2% d. rising growth from 0.6% to 1.7%

#6. Answer: (d) is the best choice

____#7. Euro Area youth unemployment is falling, but remains relatively high at about ________ ? a. 10% b. 14% c. 17% d. 20%

#7. Answer: (d) is the best choice

____#8. The past few months shows that the Euro Area has a. above target inflation rates > 2% b. low and stable core inflation of about 1.0% c. essentially deflation and very serious d. high and choppy inflation between 6% and 3%

#8. Answer: (b) is the best choice

____#9. Which country is NOT currently using a NIRP, that is, a negative interest rate policy ? a. Sweden b. the Euro Area c. Japan d. the US

#9. Answer: (d) is the best choice There's only one country in the world where negative interest rates are working - Sweden #9. Answer: (d) is the best choice

____#10. The Euro Area’s main economic problem is a. too much investment uncertainty b. one monetary policy, but no single fiscal policy c. a lack of labor resources d. declining productivity growth

#10. Answer: (b) is the best choice ...the lesson from the last five years is that those countries that use the euro are paying a heavy price for the lack of a common system for transferring resources from one part of the single-currency area to another. There is one currency and one interest rate, but there is no fiscal union to stand alongside monetary union – the Guardian, Feb 2016 #10. Answer: (b) is the best choice

____#11. The 3rd arrow in the original Abenomics is a. monetary policy b. fiscal policy c. exchange rate policy d. institutional and regulatory reform

#11. Answer: (d) is the best choice “The “third arrow” of Abenomics — reforms to make the economy more productive — is barely a work in progress...” — Japan Times, Feb 2016 #11. Answer: (d) is the best choice

____#12. Which of the following would best describe Japan’s annualized growth performance recently? a. a sustained rise to about 2% b. very cyclical and declining amplitudes c. depression levels of negative growth d. very stable and level growth at 1%

#12. Answer: (b) is the best choice

____#13. The Japanese unemployment rate over the past year (2015 to 2016) has been a. extremely choppy up and down in the range 1% to 4% b. stable in the range 3.1% – 3.4% c. rising quickly from 2.4% to 3.2% d. falling from a high of 5% to 1.8%

#13. Answer: (b) is the best choice

____#14. Japan’s central bank has been using a QQE policy to stimulate its aggregate demand. This QQE policy involves a. buying only government bonds b. buying foreign government bonds c. buying private sector securities (ETFs and J-REITs) d. buying BOJ issued securities

#14. Answer: (c) is the best choice ... b) The Bank will purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at annual paces of about 3 trillion yen4 and about 90 billion yen, respectively. c) As for CP and corporate bonds, the Bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen, respectively ꟷ Bank of Japan "Quantitative and Qualitative Monetary Easing with a Negative Interest Rate” January 29, 2016 #14. Answer: (c) is the best choice

____#15 Japan’s YoY inflation rate for the most recent few months has been a. negative (deflation) b. positive and rising (inflation) c. positive and falling (disinflation) d. very stable at 2% annually (inflation)

#15. Answer: (a) is the best choice

____#16. According to state statistics, China’s annual growth is falling, but may have stabilized at its most recent level of _____ a. 7.2% b. 6.7% c. 6.2% d. 5.8%

#16. Answer: (b) is the best choice

____#17. Recently, China’s inflation rate can be characterized as a. quickly rising b. slowly falling c. stable, with small fluctuations up and down d. highly variable up and down movements

#17. Answer: (c) is the best choice

____#18. Which statement below is NOT true about the Chinese economy? a. China’s SOEs are very inefficient and need reform b. China’s rebalancing efforts are not working well c. China’s unemployment rate is not a reliable statistic d. Since 2014, the RMB has been rising against the USD

#18. Answer: (d) is the best choice

____#19. The strong relation between China’s imports & exports changed radically beginning in which year? a. 2011 b. 2012 c. 2013 d. 2014

#19. Answer: (d) is the best choice, however 2010 also saw a change Beginnings of the Red Supply Line ? #19. Answer: (d) is the best choice, however 2010 also saw a change

____#20. The concept of China’s rebalancing means changing demand from investment and exports to ________ a. consumption and government services b. imports and energy industries c. manufacturing and social services d. housing and commercial building of structures

#20. Answer: (a) is the best choice, but it doesn’t seem to be working Gross Capital Formation as % of GDP #20. Answer: (a) is the best choice, but it doesn’t seem to be working