CBE Evaluation Format and Content 3 — Questions and Answers
Question 1: Which scenario best illustrates an application-level CBE exam question as opposed to a recall question?
- Given quarterly GDP data showing two consecutive declines, identify the likely Fed policy response (Correct answer)
- Define what GDP stands for
- List the components of the Consumer Price Index
- State the current federal funds rate target
Correct answer: Given quarterly GDP data showing two consecutive declines, identify the likely Fed policy response
Application questions require candidates to use economic knowledge to analyze a scenario, not just recall definitions.
Question 2: The CBE exam's International Trade and Finance domain would most likely test a candidate's understanding of:
- Exchange rate determination, balance of payments, and trade policy effects (Correct answer)
- Federal Reserve open-market operations and reserve requirements
- Capital budgeting techniques for domestic investment projects
- Consumer demand theory and elasticity of domestic goods
Correct answer: Exchange rate determination, balance of payments, and trade policy effects
International Trade and Finance covers cross-border economic relationships including exchange rates and trade policy.
Question 3: A CBE candidate notices that the Financial Markets and Instruments domain appears on the content outline. This domain most likely includes questions on:
- Interest rate determinants, bond pricing, equity valuation, and derivatives basics (Correct answer)
- Microeconomic consumer surplus and deadweight loss
- Regression analysis and hypothesis testing methodology
- Workforce productivity and human capital theory
Correct answer: Interest rate determinants, bond pricing, equity valuation, and derivatives basics
Financial Markets and Instruments covers securities, pricing mechanisms, and related financial instruments.
Question 4: Why might the CBE exam include questions about data interpretation and quantitative methods?
- Business economists must analyze datasets, build forecasts, and communicate quantitative findings in practice (Correct answer)
- Quantitative methods are included solely to satisfy accreditation standards
- These questions replace the need for any work experience requirement
- Quantitative content is tested only for candidates with a graduate degree
Correct answer: Business economists must analyze datasets, build forecasts, and communicate quantitative findings in practice
Applied quantitative skills are central to the business economist's role, justifying their inclusion in the exam.
Question 5: An item with a stem, four answer options, and one correct answer—with the remaining three designed to be plausible—is known in testing terminology as:
- A four-option multiple-choice item with distractors (Correct answer)
- A dichotomous true/false item
- A matching exercise
- An open-response performance task
Correct answer: A four-option multiple-choice item with distractors
The incorrect but plausible answer options are called distractors, and this is the standard CBE item format.
Question 6: If the CBE content outline assigns 20% weight to Managerial Economics, approximately how many of 100 exam questions would cover that domain?
- 20 questions (Correct answer)
- 5 questions
- 50 questions
- 80 questions
Correct answer: 20 questions
A 20% weight on a 100-question exam translates directly to approximately 20 questions from that domain.
Question 7: Which practice is most consistent with CBE exam-day integrity requirements?
- Storing all personal electronic devices before entering the testing room (Correct answer)
- Bringing a financial calculator pre-loaded with formula sheets
- Sharing notes with another candidate during a scheduled break
- Recording questions encountered during the exam for later review
Correct answer: Storing all personal electronic devices before entering the testing room
Exam integrity rules prohibit unauthorized materials and devices, requiring candidates to secure electronics before testing.
CBE Evaluation Format and Content 3
Which scenario best illustrates an application-level CBE exam question as opposed to a recall question?