1. Two analysts make the following statements:
Analyst 1: Recessions start when the central bank runs out of foreign reserves.
Analyst 2: Recessions start when real GDP has two consecutive quarters of negative growth.
Which analyst’s statement is most likely correct?
A. Analyst 1.
B. Analyst 2.
2. Exports most likely respond to:
A. the level of imports.
B. pace of global growth.
C. pace of domestic GDP growth.
3. Which of the following statements about economic indicators is most likely true?
A. Inventory sales ratio is considered a coincident indicator because inventories start accumulating even with a slight dip in sales.
B. Money supply is considered a lagging indicator because monetary policy takes time to be implemented.
C. The stock index level is considered a leading indicator because stock movements offer a useful early signal on economic cycles.