Summer Quiz

Some neighbors had a block party last night.  Our neighborhood has many intelligent people.  While there is plenty of diversity in race and religion, there are many shared values about kids and community.

Nearly everyone is a successful professional person.  There were plenty of opinions about the economy and the current investing climate.  Partly (but not entirely) from this experience, here are a few questions.

  1. We have an honest coin which we flip 20,000 times.  We keep a running count of whether heads or tails is in the lead.  How many lead changes would you expect?  (A good ballpark answer could be the winner here).
  2. The M1 and M2 measures of money supply have increased dramatically this year, in response to the Obama budget and stimulus spending. (True or False)
  3. The number of "jobs created" last month was negative.  Over 300,000 jobs were lost, and this number was skewed by imaginary jobs from something called the "birth death model."  How many jobs were really created?
  4. The Fed balance sheet has ballooned since Obama took office. (True or False)
  5. You get the chance to be on a game show.  The host lets you pick one of three doors for a prize.  One door has a great prize and the others have trivial rewards.  You make your pick.  The host (who knows where the real prize is) reveals one of the two alternatives and offers you the chance to switch your choice.  Should you do so?
  6. The percentage of those currently unemployed rivals the figures from the Great Depression.  (True or False).
  7. The government stress tests for financial institutions have something called an "adverse scenario."  The conditions from that scenario have already been met, or nearly so.  (True or False)
  8. From the peak, how much have personal consumption expenditures declined?

If you think you are smart and knowledgeable, send us an entry at falin at newarc dot com.  We will give a nice prize and some recognition to the winning entry.  We have a couple of days of travel, so you have some time to submit your answers.

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  • Gene June 21, 2009  

    you have misstated question 5. For it truly to produce the answer I believe you want, you need to imply that no matter what, the gameshow host will offer the switcheroo. because if he only does it sometimes, the answer is based entirely on his proclivities and not necessarily on the probability (i.e. he might only take one away and offer the switch if you guessed correctly in the first place).

  • Jeff Miller June 21, 2009  

    Gene – -Your point is well taken. The host always offers a switch.
    Thanks for pointing this out.

  • Kevin Winnett July 5, 2009  

    Yes, and the one about the game show host is a bit of a trick question. I recall this from game theory/stats, and don’t know how it would give any useful info/insight into somebody’s investment acumen or other variable you might be trying to test.
    The other questions were interesting, but more about somebody’s depth of econ knowledge.

  • Jeff Miller July 5, 2009  

    Kevin — stay with us. There is a point to each question, and I’ll get around to this one.
    Thanks for your interest.

  • Mihai Radu July 14, 2009  

    1. 6666
    2. False
    3. 10000
    4. False
    5. No
    6. Yes (if we measure by Employment Rate and if we adjust for the social trend of women working in the modern era)
    7. True
    8. 40%

  • Media Dissertation January 11, 2010  

    Blogs are so informative where we get lots of information on any topic. Nice job keep it up!!