Test yourself: Global Economy Quiz: 25 Questions Across Every Topic

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Reading is one thing; recalling it under pressure is another. This exam has 25 questions that cut across every part of Global Economy, from the basics to the mechanisms that connect them.

Answers are hidden until you click, each with a one-line explanation, so you can check yourself and see exactly which topics to revisit. Take it once cold, read the explanations, then try again a week later; most people are surprised by how much the second pass improves.

A sample of the questions (25 on the full page)

■A bank approves a $250,000 business loan and credits the money to the borrower’s account. Before the borrower spends anything, what has happened to the bank’s balance sheet and to the money supply (Part 0: How Money Was Born, Part 3: Banking & Financial System)?

■A fund borrows ¥1,200,000,000 for three months at 0.25% a year, converts it at ¥150 per dollar into $8,000,000 and buys Treasury bills yielding 4.5% a year, with $800,000 of margin. Then the Bank of Japan raises its rate and the yen strengthens to ¥138 per dollar. What is the result after three months (Section 0.10: How a Currency’s Value Is Determined — and Who Does It, Section 9.2: Japan’s Lost Decades — When an Economy Stops)?

■In the IMF’s April 2026 estimates India ranked sixth in the world by GDP at market rates in 2025, at about $3.9 trillion. Suppose it now takes 10% more rupees to buy a dollar while Indian output is unchanged. What happens to India’s GDP measured in dollars (Section 1.14: Purchasing Power Parity — Why GDP Rankings Deceive, Section 0.10: How a Currency’s Value Is Determined — and Who Does It)?

■India imported crude oil worth about $123.4 billion in 2025-26 (Section 1.21: Energy and Commodities as a Financial System). If the world price rises 20% and volumes stay the same, how large is the extra bill relative to India’s 2025 GDP of about $3.9 trillion at market rates, and can an RBI rate hike lower it (Section 1.14: Purchasing Power Parity — Why GDP Rankings Deceive, Section 10.2: The Reserve Bank of India — The Economy’s Guardian)?

■Suppose the Fed raises both the interest it pays on reserves (IORB) and its overnight reverse repo (ON RRP) rate by a quarter point, and buys or sells no bonds at all. Why does the market federal funds rate still rise by about a quarter point (Section 2.10: The Federal Funds Rate: How the Fed Actually Sets the Price of Money, Section 3.2: How Banks Create Money — Fractional Reserve Banking)?

■A bank in a third country never agreed to Western sanctions on Russia, yet it faces pressure to stop dealing with sanctioned Russian banks. Why do US sanctions reach it (Section 2.5: The US Dollar as the World’s Reserve Currency, Section 1.18: Sanctions — Finance as a Weapon, Section 3.5: How Money Crosses Borders — SWIFT and Correspondent Banking)?

■A bank holds $100 billion of long-term Treasury bonds with a duration of about 6.0, funded mostly by uninsured deposits. Yields rise 2.5 percentage points. Using price change ≈ duration × yield change, how large is the paper loss, and what turns it into a failure (Section 3.9: Bank Regulation — and the SVB Case Study, Section 2.9: Bonds and the Yield Curve — The Market That Rules Them All)?

■In September 2019 the secured overnight rate (SOFR) jumped from 2.43% to 5.25% in a day, although no bank was insolvent. Which later design change in how the Fed manages overnight rates responds most directly to that kind of cash squeeze (Section 3.16: The Repo Market — The Financial System’s Overnight Plumbing, Section 2.10: The Federal Funds Rate: How the Fed Actually Sets the Price of Money)?

■The Fed buys $2 billion of Treasury bonds from a pension fund (quantitative easing). Which describes the three balance sheets afterward, and what does it cost the Fed at an IORB of 3.90% (Section 3.2: How Banks Create Money — Fractional Reserve Banking, Section 0.9: How Currency Is Created Today — and How Much Is Too Much, Section 2.10: The Federal Funds Rate: How the Fed Actually Sets the Price of Money)?

■A short seller (Part 4: Stock Markets & IPOs) is screening for the early warnings that preceded Enron and Wirecard (Section 5.6: When the Numbers Lie — Financial Fraud and Its Anatomy). Which company shows the classic red flag?