CFA Domain 3: Economics (Quiz 1)

Profit-maximizing monopolists most likely attempt to produce a level of output at which marginal cost equals:

"An analyst compiles the following consumption basket data: The February 20X5 Laspeyres inflation rate is closest to:"

"An analyst gathers current price and cost information about a firm operating in a perfectly competitive market: Based only on this information, which of the following is the firm's optimal course of action in the long run?"

"An analyst has collected pertinent data and estimated a demand curve function for annual sales of imported vehicles (Qm): Additionally, the analyst has estimated the average price of imported vehicles (Pm) at €40,000, the average price of domestically produced vehicles (Pd) at €25,000, and regional household income (I) at €46,000. The own-price elasticity of demand is closest to:"

If an economy has stabilized GDP growth and moderate inflation, it is most likely in which of the following phases of the business cycle?

If firms' supply curves can be used to determine the optimal, profit-maximizing price, those firms are most likely operating in:

When the price of a good with a downward-sloping demand curve changes, the substitution and income effects have opposite results. The good is most likely a(n):

The cross-price elasticity between complementary goods is most likely:

If the consumer price index (CPI) in the United Kingdom rises more than the CPI in India, the real INR/GBP exchange rate most likely:

A US investor receives a dividend payment from a French company. The dividend is most appropriately classified as a:

A country pursues tight fiscal policy and easy monetary policy for several years. Which of the following are the most likely consequences for the size of the public and private sectors relative to the country's GDP?

A country has a current account deficit due to a low rate of private savings. Which of the following is most likely to finance this current account deficit?

A recessionary gap most likely results from which of the following?

A dealer quotes the 6-month forward exchange rate between the euro (EUR) and the US dollar (USD) at USD/EUR 1.1550. The dealer also quotes the 6-month forward points as a percentage at 1.4%. The spot exchange rate for USD/EUR is closest to:

A country has a budget deficit of EUR 10 billion and a foreign trade surplus of EUR 5 billion. All else being equal, domestic savings will most likely exceed domestic investment by:

A developing economy has a target exchange rate for its currency. The inflation rate in the developing economy drops below the inflation rate in the target currency. Central bank action to defend the target exchange rate is most likely to result in a decrease in the developing economy's:

All else being equal, if the domestic price level decreases relative to the foreign price level, the real exchange rate between the two currencies, when quoted as domestic currency per unit of foreign currency, will most likely:

If a market has low barriers to entry and numerous competitors selling differentiated products, the market's structure is best described as:

A firm is facing market prices that are below average total cost but above average variable cost. The optimal action for the firm in the short run is most likely to:

A marketing consultant finds that the income elasticity of Product X is 0.27. Based only on this information, the consultant's most appropriate conclusion is that Product X is: