Macro & Markets

Daily questions about rates, inflation, business cycles, and the signals behind market narratives.

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Today's question

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Okun's law describes an empirical relationship between which two variables?

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Oct 25
A fixed-coupon bond is trading below its par value. What does this imply about its yield to maturity relative to its coupon rate?
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Oct 24
Which of the following is an example of an automatic fiscal stabiliser?
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Oct 23
Which of the following is recorded in a country's current account rather than its financial account?
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Oct 22
How does a zero-coupon bond deliver its return to investors?
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Oct 21
In a currency carry trade an investor borrows in a low-interest-rate currency to invest in a higher-yielding one. What is the main risk to this strategy?
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Oct 20
What is disinflation?
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Oct 19
Using the Gordon growth model, what is the value of a share expected to pay a dividend of 2 next year, with a required return of 8 percent and dividends growing 3 percent a year forever?
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Oct 18
In the equation of exchange, MV = PY, if velocity and real output are held constant, what does an increase in the money supply lead to?
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Oct 17
How is the unemployment rate calculated in standard labour statistics?
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Oct 16
Credit spreads between corporate bonds and government bonds of the same maturity widen sharply. What does this most directly signal?
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Oct 15
Nominal GDP grew 6 percent over a year while the GDP price index rose 4 percent. Approximately how much did real GDP grow?
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Oct 14
What does a company's price-to-earnings ratio measure?
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Oct 13
If a country's currency appreciates against its trading partners' currencies, what is the typical effect on its trade?
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Oct 12
Which rule of thumb is most commonly cited in the press as the definition of a recession?
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Oct 11
A ten-year nominal government bond yields 4 percent and a ten-year inflation-linked bond from the same issuer yields 1.5 percent. What is the breakeven inflation rate?
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Oct 10
Which of the following best describes a central bank acting as lender of last resort?
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Oct 9
A savings account pays a nominal interest rate of 5 percent and expected inflation is 3 percent. What is the approximate real interest rate?
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Oct 8
What distinguishes core inflation from headline inflation in most national statistics?
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Oct 7
A bond has a modified duration of 7. If its yield rises by one percentage point, approximately how does its price change?
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