Market Indicators: Understanding Economic Signals
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Questions and Answers

What does Gross Domestic Product (GDP) measure?

  • The average change in prices paid by consumers
  • The total value of goods and services produced within a country over a specific period (correct)
  • The percentage of the labor force that is jobless
  • The average change in selling prices received by domestic producers

    • How does positive GDP growth typically impact the financial markets?

  • It leads to higher bond prices
  • It causes market declines
  • It decreases investor confidence
  • It boosts investor confidence and leads to higher stock prices (correct)

    • What does the unemployment rate indicate?

  • The total number of jobs created
  • The level of inflation in the economy
  • The percentage of the labor force that is jobless and actively seeking employment (correct)
  • The rate of GDP growth

    • How does high unemployment generally affect consumer spending and market sentiment?

    <p>It decreases consumer spending and leads to bearish market sentiment</p> Signup and view all the answers

    What is the significance of the Consumer Price Index (CPI)?

    <p>It measures the average change in prices paid by consumers for a basket of goods and services</p> Signup and view all the answers

    How can rising CPI affect the financial markets?

    <p>It can indicate inflationary pressures, leading to potential interest rate hikes and market volatility</p> Signup and view all the answers

    What does the Producer Price Index (PPI) measure?

    <p>The average change in selling prices received by domestic producers for their output</p> Signup and view all the answers

    How do higher interest rates typically impact economic growth and stock prices?

    <p>They dampen economic growth and reduce stock prices</p> Signup and view all the answers

    What do housing market indicators, such as housing starts and building permits, signify?

    <p>The health and direction of the housing market, influencing construction activity and consumer spending</p> Signup and view all the answers

    What is the impact of a positive balance of trade on the domestic currency and market sentiment?

    <p>It strengthens the domestic currency and boosts market sentiment</p> Signup and view all the answers

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