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

2. _____ #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%

3. 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

4. ____ #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%

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

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

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

8. ____#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%

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

10. ____#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%

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

12. ____#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%

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

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

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

16. ____#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%

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

18. ____#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

19. #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

20. ____#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

21. #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

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

23. #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

24. ____#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%

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

26. ____#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%

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

28. ____#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

29. #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

30. ____#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)

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

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

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

34. ____#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

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

36. ____#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

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

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

39. #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

40. ____#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

41. #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