The economy has gone through three consecutive quarters of economic decline with no immediate end in sight, and therefore could be said to be:

A) in a Recovery.

B) Lagging.

C) in a Recession.

D) in a Depression.

Answer: D) in a Depression.

Which of the following fundamental analysis theories might rely on lowering and raising taxes to stimulate or cool down an economy?

A) Short interest.

B) Breakout.

C) Keynesian.

D) Supply side.

Answer: C

A recession is defined as a drop in GDP for:

A) 2 consecutive quarters.

B) 3 consecutive quarters.

C) 4 consecutive quarters.

D) 6 consecutive quarters.

Answer: A

Which of the following choices does NOT influence the level of interest rates?

A) Inflation expectations.

B) Federal Reserve's monetary policy.

C) New housing starts.

D) Amount of loanable funds in the financial markets

Answer: C) New housing starts.

The economic theory that says economic growth results from lower tax rates and lower government spending is:

A) demand-side theory.

B) supply-side theory.

C) monetary theory.

D) Keynesian theory.

Answer: B) supply-side theory.

You note that "help wanted" advertisements in "The Wall Street Journal" have been increasing. This economic measure is a:

A) coincident indicator.

B) none of these.

C) leading indicator.

D) lagging indicator.

Answer: C) leading indicator.