Macro Environment

75 Questions | Total Attempts: 214

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Macro Environment

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Questions and Answers
  • 1. 
    The invisible gorilla clip suggests that human’s
    • A. 

      Typically lack peripheral vision

    • B. 

      Cannot pay attention to the task at hand

    • C. 

      Are easily distracted by disturbances that come into their environment

    • D. 

      Easily pick up on non-obvious cues

    • E. 

      Are good at doing more than one thing at the same time

  • 2. 
    The capacity of human’s to predict the future
    • A. 

      Is nearly perfect

    • B. 

      Depends on the algorithm employed

    • C. 

      Is generally contained to rather superficial and incremental changes

    • D. 

      Falls apart when people become really good at identifying black swans

    • E. 

      Depends on reasoning from past examples and therefore is quite accurate

  • 3. 
    Population and security challenges ar
    • A. 

      Unrelated to political and economic challenges

    • B. 

      Are related since youth violence can be partially neutralized by a strong state

    • C. 

      Are related since governments effectively fight unemployment

    • D. 

      Are related since the Keynesian revolution allowed governments to fine tune the economy to the point where unemployment is no longer a problem in most of the world

    • E. 

      Are related because economic growth grows continuously and the business cycle no longer produces recessions

  • 4. 
    Until the recent global financial collapse, the trend had been towards
    • A. 

      Greater business cycle stability

    • B. 

      Greater business cycle instability

    • C. 

      Continued wide fluctuations in the business cycle unchanged since the period of the Great Depression

    • D. 

      Greater stability in unemployment, with greater volatility in inflation leading to a pathology of enhanced stagflation

    • E. 

      Worldwide stagnation in economic growth

  • 5. 
    Fiscal policy
    • A. 

      Was grudgingly accepted soon after Keynes published his General Theory and implemented successfully by governments throughout the world

    • B. 

      Requires governments to spend more when there is a recession

    • C. 

      Requires government to move toward a surplus when an economy is overheated and headed toward high levels of inflation

    • D. 

      Necessitates a heavy hand since automatic stabilizers result in government expenditures declining when there is a recession

    • E. 

      Has a positive long term effect in lowering interest rates as government deficits do not compete with private borrowing

  • 6. 
    The consensus viewpoint among macroeconomists is that
    • A. 

      Fine-tuned fiscal and monetary policies are the primary causes of economic growth

    • B. 

      Fine-tuned fiscal and monetary policies are incidental to long-term economic growth

    • C. 

      Except for institutional structure, government spending and taxes contribute the most to long term economic productivity and growth

    • D. 

      Economic fluctuations can be entirely eliminated if a nation just invests in its human and physical capital

    • E. 

      The short run cure for a recession is investment in R&D and technology

  • 7. 
    Automatic stabilizers signify
    • A. 

      Growing government surpluses during recessions

    • B. 

      Declining prices during recessions

    • C. 

      Enhanced government revenues from corporate taxes during recessions

    • D. 

      Reduced government expenditures for unemployment compensation during recessions

    • E. 

      Growing government deficits during recessions because of reduced taxable income and increased government obligations for program like unemployment insurance

  • 8. 
    Economists tend to believe that long run economic growth is a consequence of
    • A. 

      Fiscal policy

    • B. 

      Monetary policy

    • C. 

      Fiscal and monetary policy

    • D. 

      Micro-regulation

    • E. 

      Micro-regulation, investment, technological investments, and international trade

  • 9. 
    Stagflation is an economic condition
    • A. 

      That hit the U.S. after the Second World War

    • B. 

      In which high levels of inflation combine with low levels of economic growth

    • C. 

      That is a contradiction in terms that economists have ruled out as possible

    • D. 

      That was caused by President Nixon fixing the price of oil

    • E. 

      That was caused by President Carter attempting to achieve energy independence

  • 10. 
    Population growth in the world
    • A. 

      Persists at historically disturbing levels

    • B. 

      Is starting to slow to historically low levels and in some cases is shrinking

    • C. 

      Remains very high in parts of Southern Europe in contrast to the rest of the world

    • D. 

      Has tapered off and is statistically related to a significant drop in global violence

    • E. 

      Has tapered off and is statistically related to a falloff in human dignity

  • 11. 
    Post 9/11
    • A. 

      The Federal Reserve cut the money supply to prevent inflation

    • B. 

      The federal government lowered defense spending to prevent a recession

    • C. 

      Foreign governments started to reduced the purchase of U.S. bonds, thus raising interest rates

    • D. 

      A combination of tax cuts, increased military spending, lower interest rates, and foreigners buying U.S. bonds fed a U.S. real estate boom

    • E. 

      The federal government raised taxes in order to finance the war against terror

  • 12. 
     Today, the world's largest emitter of greenhouse gases is
    • A. 

      The U.S.

    • B. 

      Canada

    • C. 

      China

    • D. 

      India

    • E. 

      Russia

  • 13. 
    Which of these statements is most true?
    • A. 

      Events in the world tend to follow events with definitive resolution

    • B. 

      Trends tend to continue unabated

    • C. 

      Trends move in a definitive negative or positive direction

    • D. 

      Equally powerful and opposing trends can survive simultaneously without resolution for long periods of time

    • E. 

      Weak signals result in the emergence of heroes, charismatic individuals, who tend to resolve historical tensions once and for all

  • 14. 
    The 1992 “Earth Summit” (Rio Treaty) called for
    • A. 

      Gradual increases of greenhouse gases despite potential climate disruption

    • B. 

      Common responsibilities for all countries in the world to reduce global greenhouse emissions

    • C. 

      Immediate rollback of greenhouse gas emissions to 1985 levels

    • D. 

      Stabilization of greenhouse gas emissions only after further scientific clarity about their effects on climate and the environment

    • E. 

      Common but differentiated responsibilities for emission stabilization (meaning that industrial countries must act first)

  • 15. 
    The following type of vehicle has very high potential for fuel savings, but also is projected to cost the most
    • A. 

      Battery electric

    • B. 

      Hybrids

    • C. 

      Gasoline internal combustion

    • D. 

      Plug-in hybrid

    • E. 

      Diesel

  • 16. 
    Historical analogies
    • A. 

      Are the best way to construct scenarios because the present always repeats the past

    • B. 

      Provide near perfect insight into the situation the U.S. faces in Iraq

    • C. 

      Provide many possibilities from World War I to Munich to World War II to the start of the Cold War to Vietnam for understanding the U.S. experience in Iraq

    • D. 

      Need little explanation

    • E. 

      Show that young people are not the at the root of today’s wars

  • 17. 
    A key driver of the future is likely to be the clash between which of these categories of young people?1. The serious, intent, motivated, resentful, hopeless, disillusioned, who feed off memories of historic injustices, are heavily attached to ethnic and religious communities, averse to free thinking, and tolerant of violence 2. The indifferent and untraditional, lacking in serious material aspirations, selfless, vain, egotistical, narcissistic, eager for praise, conforming, and spontaneous 3. The optimistic, who aspire to affluence, are entrepreneurial, favor freedom of choice, are cosmopolitan and enjoy global popular culture
    • A. 

      1 & 2

    • B. 

      2 & 3

    • C. 

      1 & 3

    • D. 

      None of the above

    • E. 

      All of the above

  • 18. 
    Today, the most proven and cost-effective clean energy potential comes from
    • A. 

      Biodiesel

    • B. 

      Nuclear power

    • C. 

      Solar power

    • D. 

      Wind power

    • E. 

      Energy efficiency

  • 19. 
    U.S. gasoline taxes are at a level
    • A. 

      Equal to every country in the world

    • B. 

      Below almost every country in the world

    • C. 

      Above Japanese levels but below European levels

    • D. 

      Equal to Japanese levels and above European levels

    • E. 

      Equal to European levels for diesel fuels but below European levels for regular gasoline

  • 20. 
    The purpose of scenarios is to
    • A. 

      Predict the future

    • B. 

      Forecast what happens

    • C. 

      Eliminate all traces of uncertainty in strategy-making

    • D. 

      Create stories about what might happen in order to influence the future

    • E. 

      Create fixed roadmaps and final action plans that commit organizations for the long run

  • 21. 
    A high percentage of young people in a population
    • A. 

      Always leads to inordinate amount of violence

    • B. 

      Never leads to inordinate amount of violence

    • C. 

      Only leads to an inordinate amount of violence when prior generations have been at peace

    • D. 

      Only leads to an inordinate amount of violence when such special conditions are in place as charismatic leaders who take advantage of youth vulnerability, the existence of strong ideologies, a breakdown in the rule of law, and economic instability

    • E. 

      Always has led to an inordinate amount of violence in Europe but not Asia

  • 22. 
    The great financial meltdown of the first decade of the 21st century was followed by
    • A. 

      Government inaction in the face of the magnitude of the crisis

    • B. 

      Massive government stimulus spending but an inactive Federal Reserve

    • C. 

      Massive government stimulus spending and Federal Reserve lowering of interest rates

    • D. 

      A simple bailout of the banks but nothing more

    • E. 

      A government takeover of the banking system, with majority government ownership of the major banks

  • 23. 
    The Federal Reserve
    • A. 

      Must receive Congressional approval when it raises or lowers interest rates

    • B. 

      Must obtain approval from the executive branch of government when it buys or sells bonds to banks

    • C. 

      Can raise the discount rate without Congressional approval but cannot tinker with reserve requirements without the full vote of the House and Senate

    • D. 

      Is entirely independent of the executive and legislative branches in its oversight of the money supply

    • E. 

      Only received independence from the executive and legislative branches to set monetary policy during the Ford administration

  • 24. 
    Romances
    • A. 

      In retrospect never live up to their promise

    • B. 

      Build momentum and necessarily lead to more romances

    • C. 

      Always result in tragedies

    • D. 

      Always result in comedies

    • E. 

      Can swing back and forth over time from romance to tragedy to comedy and so on

  • 25. 
    Between 1981-2006, business cycle instability
    • A. 

      Diminished

    • B. 

      Grew

    • C. 

      Stayed about the same

    • D. 

      Accelerated

    • E. 

      Was entirely eliminated