Weekly Review Quiz As of 2008-05-01

Weekly Review Quiz as of 2008-05-01
Economics:Macro

Economy, Credit Woes Foil Cities' Big Projects
by Jennifer S. Forsyth
04/25/2008
http://online.wsj.com/article/SB120906413556442317.html?mod=djem_jiew_emq

1. Large scale urban development projects are being

a) contemplated now that financial capital has shifted from housing to commercial real estate.
b) cancelled or delayed because they rely on tax revenues which are shrinking with the economic slowdown.
c) cancelled or delayed because they rely on private equity which is shrinking with the economic slowdown.
* d) cancelled or delayed because they rely heavily on debt financing which is currently difficult to obtain.
e) expanded as high gas prices prompts people to migrate back into cities.

Fed Cuts Key Rate, Signals A Pause
by Greg Ip
05/01/2008
http://online.wsj.com/article/SB120957689231356771.html?mod=djem_jiew_emq

2. The fact that Libor is unusually high compared to the expected federal funds rate indicates that

a) banks are lending freely.
* b) banks are hoarding cash.
c) European banks expect the Fed to continue cutting rates.
d) European banks expect the U.S. to reduce taxes to stimulate the economy.
e) the economy is surely entering a recession.

3. The Fed signaled a likely pause in cutting rates because

a) the economy has averted recession.
b) the economy has entered a recession.
c) further rates cuts could cause investors to drive up the value of the dollar, which could lead to higher inflation.
* d) further rates cuts could cause investors to drive down the value of the dollar, which could lead to higher inflation.
e) further rates cuts could cause investors to drive up the value of the dollar, which could lead to lower inflation.

The Prospect of Lingering In Purgatory
by Mark Gongloff
05/01/2008
http://online.wsj.com/article/SB120960300657158021.html?mod=djem_jiew_emq

4. The Institute for Supply Management index of manufacturing is not expected to fall to recession levels because

a) productivity is rising.
b) imports are rising.
* c) exports are rising.
d) imports are falling.
e) exports are falling.

Shrinking Dollar Meets Its Match In Dolphin Teeth
by Yaroslav Trofimov
04/30/2008
http://online.wsj.com/article/SB120951522912254575.html?mod=djem_jiew_emq

5. In the Solomon Islands, dolphin teeth are appreciating in value because

* a) of the growing population of young men who need dolphin teeth for buying brides.
b) the U.S. dollar has appreciated due to rising oil prices.
c) the euro has appreciated due to rising oil prices.
d) global warming has caused a shift in the dolphin population away from the islands.
e) global warming has caused a shift in the dolphin population toward the islands.