14. Which of the following is NOT regarded as a key determinant in the level of interest rates:

Select one:

a The expected level of inflation

b. Government's net supply/demand for public funds

c. The current level of futures markets in 90day BB; 3 year & 10 year bonds

d. Supply & demand for funds from savers & businesses

15. Which of the following is NOT an example of a 'demand shock':

Select one:

a. Changes in wage rates

b. Changes in government spending

c. Changes in the money supply

d. Changes in tax rates

16. Which of the following is NOT an example of a 'supply shock':

Select one:

a. Changes in foreign export demand

b. Floods, droughts, bushfires

c. Changes in the price or availability of certain products (like oil)

d. Changes in wage rates

17. Which of the following is NOT an example of a "supply-side policy":

Select one:

a. Encourage more investment

b. Generate faster overall economic growth

c. Government stimulus package aimed at particular industries

d. Lower marginal tax rates for businesses

e. Improve incentives to work

18. In keeping with the 'investment theory' to choose industries that will be helped by your expected economic scenario; which choice below best fits this statement -" you should choose these types of shares, if the economy is projected to do well, but not if the economy is expected to weaken":

Select one:

a. Non-cyclical shares

b. Cyclical shares

c. Defensive shares

d. Lower P/E ratio shares

19. According to the Bodie source material readings (for this week), which of the following is NOT regarded as 'a factor that will determine the sensitivity of a firm's earnings to the business cycle':

Select one:

a. The firm's operating leverage

b. The firm's financial leverage

c. The firm's sensitivity to sales

d. The firm's net profit margins

20. According to the "Industry life cycles theory" (Bodie readings), the following expectation would characterise which stage - "characterised by growth rates that are no faster than the general economy":

Select one:

a. Slowing or in relative decline

b. Maturity

c. Consolidation

d. Start-up