Question 1

In a competitive equilibrium, we assume that markets are such that

Accepted Answer

A)  consumers are price takers while firms set prices. 
B)  firms are price takers while consumers set prices. 
C)  both consumers and firms are price takers. 
D)  firms behave strategically in setting their prices. 
E)  consumers behave strategically in setting their prices. 
A)  consumers are price takers while firms set prices. 
B)  firms are price takers while consumers set prices. 
C)  both consumers and firms are price takers. 
D)  firms behave strategically in setting their prices. 
E)  consumers behave strategically in setting their prices. C

Question 2

Business cycles are

Accepted Answer

A)  similar, but they can have many causes. 
B)  each unique, but all have a single cause. 
C)  similar, and all are created from external forces. 
D)  each unique, and they can have many causes. 
E)  similar, and they all have a single cause. 
A)  similar, but they can have many causes. 
B)  each unique, but all have a single cause. 
C)  similar, and all are created from external forces. 
D)  each unique, and they can have many causes. 
E)  similar, and they all have a single cause. A

Question 3

According to Keynesian coordination failure theory, the primary causes of business cycles are

Accepted Answer

A)  monetary factors. 
B)  technology shocks. 
C)  waves of self-fulfilling optimism and pessimism. 
D)  fiscal shocks. 
E)  shocks to aggregate demand. 
A)  monetary factors. 
B)  technology shocks. 
C)  waves of self-fulfilling optimism and pessimism. 
D)  fiscal shocks. 
E)  shocks to aggregate demand. C

Question 4

Improvements in a country's standard of living are brought about in the long run by

Accepted Answer

A)  immigration policy. 
B)  technological progress. 
C)  taxes. 
D)  growth in the population. 
E)  constructing more machines and buildings. 
A)  immigration policy. 
B)  technological progress. 
C)  taxes. 
D)  growth in the population. 
E)  constructing more machines and buildings.

Question 5

Tax cuts

Accepted Answer

A)  may have no effect, if people take account of future taxes. 
B)  always stimulate economic activity. 
C)  will surely make the government default on its debts. 
D)  cause the government to borrow less. 
E)  cause unemployment. 
A)  may have no effect, if people take account of future taxes. 
B)  always stimulate economic activity. 
C)  will surely make the government default on its debts. 
D)  cause the government to borrow less. 
E)  cause unemployment.

Question 6

To be useful, macroeconomic models

Accepted Answer

A)  must be complete, accurate descriptions of the world. 
B)  never generates testable hypothesis. 
C)  must be simple. 
D)  provides a lot of intricate details. 
E)  must be extremely realistic. 
A)  must be complete, accurate descriptions of the world. 
B)  never generates testable hypothesis. 
C)  must be simple. 
D)  provides a lot of intricate details. 
E)  must be extremely realistic.

Question 7

Canada has become a more open economy because

Accepted Answer

A)  it is cheaper to ship goods between countries, and there are fewer trade restrictions. 
B)  greater trade restrictions elsewhere in the world make trade with Canada attractive. 
C)  the United States has a fragile financial sector. 
D)  the Bank of Canada promotes international trade. 
E)  of the European Union. 
A)  it is cheaper to ship goods between countries, and there are fewer trade restrictions. 
B)  greater trade restrictions elsewhere in the world make trade with Canada attractive. 
C)  the United States has a fragile financial sector. 
D)  the Bank of Canada promotes international trade. 
E)  of the European Union.

Question 8

The two key business cycle events in Canadian economic history were

Accepted Answer

A)  government budget deficits and World War II. 
B)  the Great Depression and government budget deficits. 
C)  World War II and the Great Depression. 
D)  the Great Depression and stagflation. 
E)  the productivity slowdown and the Great Depression. 
A)  government budget deficits and World War II. 
B)  the Great Depression and government budget deficits. 
C)  World War II and the Great Depression. 
D)  the Great Depression and stagflation. 
E)  the productivity slowdown and the Great Depression.

Question 9

The development most responsible for the wide-spread introduction of macroeconomic models built upon solid microeconomic foundations was the

Accepted Answer

A)  development of the Keynesian coordination failure model. 
B)  the work of Milton Friedman. 
C)  work of John Maynard Keynes. 
D)  popularization of the Solow growth model. 
E)  rational expectations revolution. 
A)  development of the Keynesian coordination failure model. 
B)  the work of Milton Friedman. 
C)  work of John Maynard Keynes. 
D)  popularization of the Solow growth model. 
E)  rational expectations revolution.

Question 10

During the 2008-2009 recession in Canada,

Accepted Answer

A)  exports decreased. 
B)  inflation increased. 
C)  unemployment decreased. 
D)  exports increased. 
E)  the real interest rate increased. 
A)  exports decreased. 
B)  inflation increased. 
C)  unemployment decreased. 
D)  exports increased. 
E)  the real interest rate increased.

Question 11

The financial crisis

Accepted Answer

A)  originated in Canada. 
B)  had no effect in Canada. 
C)  originated in the United States. 
D)  had a larger effect in Canada because of our fragile financial system. 
E)  is a myth. 
A)  originated in Canada. 
B)  had no effect in Canada. 
C)  originated in the United States. 
D)  had a larger effect in Canada because of our fragile financial system. 
E)  is a myth.

Question 12

The idea that government budget deficits do not matter under certain circumstances is

Accepted Answer

A)  called the Friedman-Lucas theory. 
B)  preposterous. 
C)  called the Ricardian equivalence theorem. 
D)  called the Milton Friedman theory. 
E)  attributed to Edward Prescott and Finn Kydland. 
A)  called the Friedman-Lucas theory. 
B)  preposterous. 
C)  called the Ricardian equivalence theorem. 
D)  called the Milton Friedman theory. 
E)  attributed to Edward Prescott and Finn Kydland.

Question 13

According to the Lucas critique, the effects of changes in economic policy

Accepted Answer

A)  can be determined by looking at macroeconomic data. 
B)  cannot always be predicted by looking at historical macroeconomic relationships. 
C)  are easy to predict. 
D)  do not require macroeconomic theory. 
E)  are known to the government. 
A)  can be determined by looking at macroeconomic data. 
B)  cannot always be predicted by looking at historical macroeconomic relationships. 
C)  are easy to predict. 
D)  do not require macroeconomic theory. 
E)  are known to the government.

Question 14

One explanation for the better performance of the Canadian economy relative to the United States since the 2008-2009 recession is

Accepted Answer

A)  a better regulated financial sector in Canada. 
B)  more generous employment insurance benefits in Canada. 
C)  better fiscal stimulus in Canada relative to the United States. 
D)  too much financial regulation in the United States relative to Canada. 
E)  a more resilient financial sector in the United States. 
A)  a better regulated financial sector in Canada. 
B)  more generous employment insurance benefits in Canada. 
C)  better fiscal stimulus in Canada relative to the United States. 
D)  too much financial regulation in the United States relative to Canada. 
E)  a more resilient financial sector in the United States.

Question 15

Since 1870 in Canada, there has been

Accepted Answer

A)  sustained economic growth until the Great Depression followed by little growth since. 
B)  sustained economic growth. 
C)  too many business cycles to sustain economic growth. 
D)  GDP measured in 2007 dollars is largely unchanged. 
E)  only small growth in average incomes. 
A)  sustained economic growth until the Great Depression followed by little growth since. 
B)  sustained economic growth. 
C)  too many business cycles to sustain economic growth. 
D)  GDP measured in 2007 dollars is largely unchanged. 
E)  only small growth in average incomes.

Question 16

In the 2008-09 recession, the government deficit

Accepted Answer

A)  stayed roughly constant. 
B)  decreased. 
C)  increased. 
D)  would have increased if the government had intervened. 
E)  was reduced by the Bank of Canada. 
A)  stayed roughly constant. 
B)  decreased. 
C)  increased. 
D)  would have increased if the government had intervened. 
E)  was reduced by the Bank of Canada.

Question 17

Which of the following best describes the unemployment rate in Canada compared to the United States?

Accepted Answer

A)  It was higher in Canada before the 2008-2009 recession, then lower after. 
B)  It was lower in Canada before the 2008-2009 recession, then higher after. 
C)  They are generally equal. 
D)  They were equal before the 2008-2009 recession, then higher in Canada after. 
E)  It has been consistently lower in the United States, before and after the 2008-2009 recession. 
A)  It was higher in Canada before the 2008-2009 recession, then lower after. 
B)  It was lower in Canada before the 2008-2009 recession, then higher after. 
C)  They are generally equal. 
D)  They were equal before the 2008-2009 recession, then higher in Canada after. 
E)  It has been consistently lower in the United States, before and after the 2008-2009 recession.

Question 18

The worldwide recession of the late 2000s

Accepted Answer

A)  happened despite strict government regulation. 
B)  was caused by excessively high interest rates. 
C)  can be characterized as a moral hazard problem. 
D)  caused the collapse of the U.S. housing market. 
E)  began with the collapse of the Asian currencies. 
A)  happened despite strict government regulation. 
B)  was caused by excessively high interest rates. 
C)  can be characterized as a moral hazard problem. 
D)  caused the collapse of the U.S. housing market. 
E)  began with the collapse of the Asian currencies.

Question 19

A trade-off between aggregate output and inflation

Accepted Answer

A)  is theoretically possible, but has never been observed in practice. 
B)  sometimes exists, but is unstable. 
C)  sometimes exists, and is stable. 
D)  is not theoretically possible, and is not observed in practice. 
E)  is the basis for fiscal policy. 
A)  is theoretically possible, but has never been observed in practice. 
B)  sometimes exists, but is unstable. 
C)  sometimes exists, and is stable. 
D)  is not theoretically possible, and is not observed in practice. 
E)  is the basis for fiscal policy.

Question 20

Monetary policy in Canada is determined by

Accepted Answer

A)  the Prime Minister of Canada. 
B)  the Finance Minister. 
C)  the Bank of Montreal. 
D)  the Bank of Canada. 
E)  the Royal Canadian Mint. 
A)  the Prime Minister of Canada. 
B)  the Finance Minister. 
C)  the Bank of Montreal. 
D)  the Bank of Canada. 
E)  the Royal Canadian Mint.

In a competitive equilibrium, we assume that markets are such that

Business cycles are

According to Keynesian coordination failure theory, the primary causes of business cycles are

Improvements in a country's standard of living are brought about in the long run by

Tax cuts

To be useful, macroeconomic models

Canada has become a more open economy because

The two key business cycle events in Canadian economic history were

The development most responsible for the wide-spread introduction of macroeconomic models built upon solid microeconomic foundations was the

During the 2008-2009 recession in Canada,

The financial crisis

The idea that government budget deficits do not matter under certain circumstances is

According to the Lucas critique, the effects of changes in economic policy

One explanation for the better performance of the Canadian economy relative to the United States since the 2008-2009 recession is

Since 1870 in Canada, there has been

In the 2008-09 recession, the government deficit

Which of the following best describes the unemployment rate in Canada compared to the United States?

The worldwide recession of the late 2000s

A trade-off between aggregate output and inflation

Monetary policy in Canada is determined by

Measurement

Business Cycle Measurement

Consumer and Firm Behaviour: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

A Monetary Intertemporal Model: Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters

Exam 1: Introduction

In a competitive equilibrium, we assume that markets are such that

Business cycles are

According to Keynesian coordination failure theory, the primary causes of business cycles are

Improvements in a country's standard of living are brought about in the long run by

Tax cuts

To be useful, macroeconomic models

Canada has become a more open economy because

The two key business cycle events in Canadian economic history were

The development most responsible for the wide-spread introduction of macroeconomic models built upon solid microeconomic foundations was the

During the 2008-2009 recession in Canada,

The financial crisis

The idea that government budget deficits do not matter under certain circumstances is

According to the Lucas critique, the effects of changes in economic policy

One explanation for the better performance of the Canadian economy relative to the United States since the 2008-2009 recession is

Since 1870 in Canada, there has been

In the 2008-09 recession, the government deficit

Which of the following best describes the unemployment rate in Canada compared to the United States?

The worldwide recession of the late 2000s

A trade-off between aggregate output and inflation

Monetary policy in Canada is determined by

Measurement

Business Cycle Measurement

Consumer and Firm Behaviour: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

A Monetary Intertemporal Model: Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters