CMAT General Awareness 1 — Questions and Answers
Question 1: Which institution is responsible for monetary policy in the United States?
- U.S. Treasury
- Federal Reserve (Correct answer)
- World Bank
- IMF
Correct answer: Federal Reserve
The Federal Reserve (the Fed) is the central bank of the U.S. and manages monetary policy.
Question 2: What does GDP stand for in economics?
- Gross Domestic Product (Correct answer)
- General Development Plan
- Global Distribution Point
- Government Debt Payment
Correct answer: Gross Domestic Product
GDP stands for Gross Domestic Product, measuring the total value of goods and services produced in a country.
Question 3: Which global organization was created to promote international trade by reducing trade barriers?
- IMF
- World Bank
- WTO (Correct answer)
- UNCTAD
Correct answer: WTO
The World Trade Organization (WTO) was established in 1995 to facilitate and regulate international trade.
Question 4: What is the term for persistent increase in the general price level of goods and services?
- Deflation
- Stagflation
- Inflation (Correct answer)
- Recession
Correct answer: Inflation
Inflation refers to a sustained rise in the general price level, reducing purchasing power.
Question 5: Which of the following is considered a 'bull market' in finance?
- Market declining by 20%
- Market rising by 20% or more (Correct answer)
- Stable market with no change
- Market with high volatility
Correct answer: Market rising by 20% or more
A bull market is characterized by rising prices, typically when a major market index gains 20% or more.
Question 6: What is the name of the U.S. legislation that governs financial reporting for publicly traded companies?
- Sherman Antitrust Act
- Sarbanes-Oxley Act (Correct answer)
- Dodd-Frank Act
- Glass-Steagall Act
Correct answer: Sarbanes-Oxley Act
The Sarbanes-Oxley Act of 2002 established strict financial reporting requirements for public companies.
CMAT General Awareness 1
Which institution is responsible for monetary policy in the United States?