Macroeconomics & Market Analysis Flashcards
7 cards from real AIP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Macroeconomics & Market Analysis flashcards as text
Fiscal policy refers to government use of:
Answer: Taxation and spending to influence economic activity
Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence macroeconomic conditions such as growth, employment, and inflation.
Which global economic concept describes the idea that similar goods should sell for the same price across countries when expressed in a common currency?
Answer: Purchasing power parity (PPP)
Purchasing power parity (PPP) holds that exchange rates should adjust so that identical goods cost the same in different countries when priced in a common currency.
A 'bear market' in equities is conventionally defined as a decline of at least:
Answer: 20% from a recent high
A bear market is conventionally defined as a decline of 20% or more in a major market index from its most recent peak.
Stagflation is an economic condition characterized by:
Answer: High inflation occurring simultaneously with stagnant economic growth and high unemployment
Stagflation combines stagnant economic growth, high unemployment, and high inflation simultaneously — a challenging combination because standard policy responses to one problem can worsen the others.
Which of the following best describes 'capital flows' in an international context?
Answer: Movement of money for investment, trade, or business operations across borders
International capital flows refer to the movement of financial assets such as investments, loans, and currencies across national borders for purposes of trade and investment.
In analyzing market efficiency, the 'semi-strong form' of the Efficient Market Hypothesis (EMH) states that:
Answer: All publicly available information is already reflected in stock prices
The semi-strong form of EMH holds that stock prices instantly reflect all publicly available information, making fundamental analysis unable to consistently generate alpha.
When a central bank intervenes to weaken its currency in foreign exchange markets, the likely intended effect on exports is:
Answer: Exports become cheaper and more competitive in foreign markets
A weaker domestic currency makes a country's exports cheaper for foreign buyers, increasing their price competitiveness and typically boosting export volumes.