Question

53. A major demographic trend that will affect the long-term growth prospects of the developed market countries compared with the emerging market countries is: (a) the sharply higher birth rate of the DM countries’ echo-baby boom generation compared with baby boomers; (b) the persistent migration of DM populations to EM developing urban centers; (c) the expected mass migration of U.S. citizens to Canada over the next decade; (d) the aging of the DM countries’ populations relative to those of the EMs.

54. Coincident indicators, such as the Index of Industrial Production: (a) remind us that economic activities occur simultaneously, based on luck (coincidence) and exogenous factors mainly; (b) provide a current perspective on some aspect of economic activity; (c) foretell what is may happen in the economy; (d) no longer are calculated and reported by the Federal Reserve.

55. Outright purchases by the Fed take place typically whenever: (a) a change in the Treasury bill target rate must be enforced; (b) the dollar is too weak relative to other major currencies (such as yen and euro); (c) a permanent injection of reserves is needed; (d) repo transactions by the desk at the New York Fed must be offset.

56. A short-hand measure of real, sustainable economic growth includes which of the following: (a) growth in productivity plus growth in the labor force; (b) growth in government spending plus growth in the monetary base; (c) expansion in the most cyclically-sensitive components of nominal GDP; (d) expansion of the size of the structurally unemployed workforce.

Answer 1

Q53) The answer is (d)  the aging of the DM countries’ populations relative to those of the EMs. Developed market countries have enjoyed the fruits from the previous baby booms which gave it demographic advantages due to the low mean ages of the population. But now the situation has changed with a lot of developed countries facing an ageing population and emerging market countries like India having a fairly young population. This will hamper long term economic growth of developed countries.

Rest all options are incorrect as they do not reflect a demographic trend that will affect the long-term growth prospects of the developed market countries compared with the emerging market countries