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Economic Indicators: 46 free SIE practice questions

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  1. Which of the following is a tool the Federal Reserve uses to implement monetary policy?easy
  2. Fiscal policy is controlled by which entity?easy
  3. The federal funds rate is best described as:medium
  4. The discount rate is the interest rate at which:medium
  5. If the Federal Reserve INCREASES reserve requirements for banks, what is the expected effect on the money supply?medium
  6. Which of the following is the correct order of the four phases of the business cycle?easy
  7. Which of the following is considered a LEADING economic indicator?medium
  8. Which of the following is a COINCIDENT economic indicator that reflects the current state of the economy?medium
  9. During a recession, the Federal Reserve would MOST likely take which of the following actions?medium
  10. An inverted yield curve, where short-term interest rates exceed long-term rates, is generally considered a predictor of:hard
  11. Gross Domestic Product (GDP) measures:medium
  12. The Consumer Price Index (CPI) measures:medium
  13. If the government wants to combat high inflation using fiscal policy, it would MOST likely:hard
  14. Which of the following is a LAGGING economic indicator?medium
  15. Stagflation refers to an economic condition characterized by:hard
  16. The Federal Open Market Committee (FOMC) is responsible for:medium
  17. Which economic indicator measures the average change over time in the prices paid by consumers for a basket of goods and services?easy
  18. An inverted yield curve most commonly suggests which of the following economic expectations?easy
  19. Which feature is unique to Treasury Inflation-Protected Securities (TIPS)?medium
  20. A period characterized by high unemployment and high inflation is known as:hard
  21. An inverted yield curve typically predicts:medium
  22. What does the Consumer Price Index (CPI) measure?easy
  23. If the yield curve inverts, what is this commonly interpreted to mean?medium
  24. How do Treasury Inflation-Protected Securities (TIPS) provide inflation protection?hard
  25. A rising Gross Domestic Product (GDP) most likely indicates which economic condition?easy
  26. An inverted yield curve most commonly indicates which future economic condition?medium
  27. Which economic indicator measures the total value of goods and services produced within a country’s borders?easy
  28. What does the Consumer Price Index (CPI) primarily measure?easy
  29. An inverted yield curve usually indicates:easy
  30. A rising unemployment rate often leads to which economic consequence?medium
  31. The Producer Price Index (PPI) is best used to measure:medium
  32. A rapidly rising Gross Domestic Product (GDP) most likely indicates which phase of the business cycle?easy
  33. If the yield curve inverts (short-term rates exceed long-term rates), what might this indicate about future economic activity?medium
  34. How do Treasury Inflation-Protected Securities (TIPS) protect investors from inflation?medium
  35. A normal (upward-sloping) yield curve indicates that:medium
  36. Which investment is MOST vulnerable to inflation risk?medium
  37. During a period of rising inflation, which asset class historically provides the BEST protection?hard
  38. Which risk is most likely to erode the real value of fixed income payments from a long-term bond?easy
  39. Which portfolio is most vulnerable to inflation risk?medium
  40. An investor’s fixed annuity pays the same monthly amount for 20 years. Which risk is most prominent?medium
  41. A retiree depends on fixed pension payments for living expenses. Which risk could most significantly impact their standard of living if…hard
  42. An investor holds a long-term Treasury bond that pays a fixed coupon. If inflation rises significantly, which risk does the investor most…medium
  43. An inverted yield curve typically signals:medium
  44. A client’s account holds Treasury Inflation-Protected Securities (TIPS). What feature makes TIPS unique?hard
  45. An inverted yield curve may indicate which economic condition?medium
  46. A registered rep intentionally misstates economic indicators such as the yield curve to interest clients in bond purchases. This is:medium
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