Question 1

If the price index is P1 in one year and P2 in the next year,the inflation rate from one year to the next is calculated as

Accepted Answer

A) (P2 - P1)× 100. 
B) (P2/P1)× 100. 
C) (P1/P2)× 100. 
D) [(P2 - P1)/P1] × 100. 
E) [(P1 - P2)/P2] × 100. 
A) (P2 - P1)× 100. 
B) (P2/P1)× 100. 
C) (P1/P2)× 100. 
D) [(P2 - P1)/P1] × 100. 
E) [(P1 - P2)/P2] × 100. D

Question 2

The most common measure of productivity is ________,which can be measured as real GDP divided by ________.

Accepted Answer

A) indexed productivity; per capita output 
B) factor productivity; the total number of factors employed in the economy 
C) capital productivity; the number of units of capital employed in the economy 
D) potential productivity; the total number of factors that would be employed in the economy at full employment 
E) labour productivity; the number of units of work effort 
A) indexed productivity; per capita output 
B) factor productivity; the total number of factors employed in the economy 
C) capital productivity; the number of units of capital employed in the economy 
D) potential productivity; the total number of factors that would be employed in the economy at full employment 
E) labour productivity; the number of units of work effort E

Question 3

What is potential or full-employment output?

Accepted Answer

A) the maximum GDP that an economy actually achieves throughout its entire history 
B) the level of output achieved during periods when all of the labour force is employed 
C) a target level of income determined by the government 
D) the GDP that would be produced if the economy's resources were fully employed at a normal intensity of use 
E) the GDP that could be produced if the economy's resources were fully employed at their maximum intensity of use 
A) the maximum GDP that an economy actually achieves throughout its entire history 
B) the level of output achieved during periods when all of the labour force is employed 
C) a target level of income determined by the government 
D) the GDP that would be produced if the economy's resources were fully employed at a normal intensity of use 
E) the GDP that could be produced if the economy's resources were fully employed at their maximum intensity of use D

Question 4

Which of the following macroeconomic variables in Canada display a significant long-run trend over recent decades? 1.real GDP
2.the price level
3.the unemployment rate

Accepted Answer

A) 1 only 
B) 2 only 
C) 3 only 
D) 1 and 2 
E) 2 and 3 
A) 1 only 
B) 2 only 
C) 3 only 
D) 1 and 2 
E) 2 and 3

Question 5

In macroeconomics,if the value of the national product increases,there is

Accepted Answer

A) an even larger increase in the value of income claims on that output,due to value added. 
B) a decrease in value of income claims on that output,due to taxation. 
C) a decrease in the value of income claims on that output,due to importing. 
D) a decrease in the value of income claims on that output,due to household saving. 
E) an equal increase in the value of income claims on that output. 
A) an even larger increase in the value of income claims on that output,due to value added. 
B) a decrease in value of income claims on that output,due to taxation. 
C) a decrease in the value of income claims on that output,due to importing. 
D) a decrease in the value of income claims on that output,due to household saving. 
E) an equal increase in the value of income claims on that output.

Question 6

If the cyclical unemployment rate is negative,then the

Accepted Answer

A) economy is operating beyond full employment. 
B) economy is operating at less than full employment. 
C) frictional unemployment rate is negative. 
D) frictional unemployment rate is greater than the structural unemployment rate. 
E) real-wage unemployment rate is negative. 
A) economy is operating beyond full employment. 
B) economy is operating at less than full employment. 
C) frictional unemployment rate is negative. 
D) frictional unemployment rate is greater than the structural unemployment rate. 
E) real-wage unemployment rate is negative.

Question 7

Most economists believe the single largest cause of rising material living standards over long periods of time is

Accepted Answer

A) productivity growth. 
B) rising employment. 
C) growth in the capital stock. 
D) real GDP growth. 
E) rising real wages. 
A) productivity growth. 
B) rising employment. 
C) growth in the capital stock. 
D) real GDP growth. 
E) rising real wages.

Question 8

In general,productivity is a measure of

Accepted Answer

A) the economy's ability to increase real GDP per capita. 
B) the amount of output that the economy produces per unit of input. 
C) real GDP as a function of total employment. 
D) the total amount of output that the economy is capable of producing. 
E) potential output. 
A) the economy's ability to increase real GDP per capita. 
B) the amount of output that the economy produces per unit of input. 
C) real GDP as a function of total employment. 
D) the total amount of output that the economy is capable of producing. 
E) potential output.

Question 9

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms.   TABLE 19-1 Refer to Table 19-1.In which years was this economy experiencing an inflationary gap?

Accepted Answer

A) 2015,2016 
B) 2012,2013 
C) 2016,2017 
D) 2014,2018 
E) 2012,2013,2017 
A) 2015,2016 
B) 2012,2013 
C) 2016,2017 
D) 2014,2018 
E) 2012,2013,2017

Question 10

It is important for policymakers to recognize that most macroeconomic variables are characterized by

Accepted Answer

A) long-run trends and short-run fluctuations. 
B) gradual increases over long periods of time. 
C) short-run fluctuations that need to be smoothed for a well-functioning economy. 
D) long-run economic growth. 
E) the impacts of the business cycle. 
A) long-run trends and short-run fluctuations. 
B) gradual increases over long periods of time. 
C) short-run fluctuations that need to be smoothed for a well-functioning economy. 
D) long-run economic growth. 
E) the impacts of the business cycle.

Question 11

Workers with experience and skills sometimes lose their jobs and become unemployed due to changing technology or market conditions,even while firms in other industries or regions are looking to hire more workers.This type of unemployment is called

Accepted Answer

A) cyclical unemployment. 
B) frictional unemployment. 
C) historical unemployment. 
D) natural rate of unemployment. 
E) structural unemployment. 
A) cyclical unemployment. 
B) frictional unemployment. 
C) historical unemployment. 
D) natural rate of unemployment. 
E) structural unemployment.

Question 12

If one Canadian dollar can be exchanged for 0.5 euros,we say that the Canadian-euro exchange rate is

Accepted Answer

A) 0.5. 
B) 2.0. 
C) 5.0. 
D) 20. 
E) 1.0. 
A) 0.5. 
B) 2.0. 
C) 5.0. 
D) 20. 
E) 1.0.

Question 13

The price level is measured in some time period with an index number,such as the number 118.6.How is such a number of use to us?

Accepted Answer

A) It allows us to compare it to the value of the same index number from another time period to determine the rate of change of the price level. 
B) The index number tells us the rate of inflation. 
C) It tells us the dollar value for the average basket of goods and services bought by the typical Canadian household. 
D) It tells us the real value for the average basket of goods and services bought by the typical Canadian household. 
E) It tells us the percentage change in the price level from the previous time period. 
A) It allows us to compare it to the value of the same index number from another time period to determine the rate of change of the price level. 
B) The index number tells us the rate of inflation. 
C) It tells us the dollar value for the average basket of goods and services bought by the typical Canadian household. 
D) It tells us the real value for the average basket of goods and services bought by the typical Canadian household. 
E) It tells us the percentage change in the price level from the previous time period.

Question 14

If 0.75 U.S.dollars can be exchanged for one Canadian dollar,we say that the Canadian-U.S.exchange rate is

Accepted Answer

A) 0.75. 
B) 75. 
C) 1.0. 
D) 1.33. 
E) 1.25. 
A) 0.75. 
B) 75. 
C) 1.0. 
D) 1.33. 
E) 1.25.

Question 15

If the Consumer Price Index changes from 120 in year one to 122 in year two,the rate of inflation in the intervening year is

Accepted Answer

A) 22%. 
B) 20%. 
C) 2.0%. 
D) 1.67%. 
E) 0%. 
A) 22%. 
B) 20%. 
C) 2.0%. 
D) 1.67%. 
E) 0%.

Question 16

If a country's labour force is 15 million people,and 1 million of those are unemployed,the country's unemployment rate is

Accepted Answer

A) 2.5%. 
B) 3.3%. 
C) 4.5%. 
D) 6.7%. 
E) 7.1%. 
A) 2.5%. 
B) 3.3%. 
C) 4.5%. 
D) 6.7%. 
E) 7.1%.

Question 17

Changes in productivity can be analyzed by looking at how GDP per employed worker changes over time or how GDP per hour worked changes over time.Why might one measure be more preferable than the other?

Accepted Answer

A) GDP per hour worked is preferable because it eliminates the need to adjust for variations in productivity between employed workers. 
B) GDP per employed worker is more accurate because the data available on the number of employed workers is more accurate than the data available on the number of hours worked. 
C) GDP per hour worked is more accurate because the average number of hours worked per employed worker has changed over time. 
D) GDP per employed worker is preferable because the number of employed workers has risen significantly over time. 
E) Both measures are equally good. 
A) GDP per hour worked is preferable because it eliminates the need to adjust for variations in productivity between employed workers. 
B) GDP per employed worker is more accurate because the data available on the number of employed workers is more accurate than the data available on the number of hours worked. 
C) GDP per hour worked is more accurate because the average number of hours worked per employed worker has changed over time. 
D) GDP per employed worker is preferable because the number of employed workers has risen significantly over time. 
E) Both measures are equally good.

Question 18

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms.   TABLE 19-1 Refer to Table 19-1.What is the output gap in 2013?

Accepted Answer

A) $408 billion 
B) $411 billion 
C) $7.1 billion 
D) $3 billion 
E) -$3 billion 
A) $408 billion 
B) $411 billion 
C) $7.1 billion 
D) $3 billion 
E) -$3 billion

Question 19

The real rate of interest is equal to the nominal interest rate

Accepted Answer

A) divided by the price level. 
B) minus the rate of inflation. 
C) multiplied by the rate of inflation. 
D) plus the risk ratio. 
E) plus the price level. 
A) divided by the price level. 
B) minus the rate of inflation. 
C) multiplied by the rate of inflation. 
D) plus the risk ratio. 
E) plus the price level.

Question 20

Suppose a country's population is 30 million and it has a labour force of 15 million people.If there are 1.35 million people unemployed,the country's unemployment rate is

Accepted Answer

A) 2.5%. 
B) 3.3%. 
C) 4.5%. 
D) 6.7%. 
E) 9.0%. 
A) 2.5%. 
B) 3.3%. 
C) 4.5%. 
D) 6.7%. 
E) 9.0%.

If the price index is P₁ in one year and P₂ in the next year,the inflation rate from one year to the next is calculated as

The most common measure of productivity is ,which can be measured as real GDP divided by .

What is potential or full-employment output?

Which of the following macroeconomic variables in Canada display a significant long-run trend over recent decades? 1.real GDP 2.the price level 3.the unemployment rate

In macroeconomics,if the value of the national product increases,there is

If the cyclical unemployment rate is negative,then the

Most economists believe the single largest cause of rising material living standards over long periods of time is

In general,productivity is a measure of

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms. TABLE 19-1 Refer to Table 19-1.In which years was this economy experiencing an inflationary gap?

It is important for policymakers to recognize that most macroeconomic variables are characterized by

Workers with experience and skills sometimes lose their jobs and become unemployed due to changing technology or market conditions,even while firms in other industries or regions are looking to hire more workers.This type of unemployment is called

If one Canadian dollar can be exchanged for 0.5 euros,we say that the Canadian-euro exchange rate is

The price level is measured in some time period with an index number,such as the number 118.6.How is such a number of use to us?

If 0.75 U.S.dollars can be exchanged for one Canadian dollar,we say that the Canadian-U.S.exchange rate is

If the Consumer Price Index changes from 120 in year one to 122 in year two,the rate of inflation in the intervening year is

If a country's labour force is 15 million people,and 1 million of those are unemployed,the country's unemployment rate is

Changes in productivity can be analyzed by looking at how GDP per employed worker changes over time or how GDP per hour worked changes over time.Why might one measure be more preferable than the other?

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms. TABLE 19-1 Refer to Table 19-1.What is the output gap in 2013?

The real rate of interest is equal to the nominal interest rate

Suppose a country's population is 30 million and it has a labour force of 15 million people.If there are 1.35 million people unemployed,the country's unemployment rate is

Economic Issues and Concepts

Economic Theories, data, and Graphs

Demand, supply, and Price

The Measurement of National Income

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Real Gdp and the Price Level in the Short Run

From the Short Run to the Long Run: the Adjustment of Factor Prices

Long-Run Economic Growth

Money and Banking

Money, interest Rates, and Economic Activity

Monetary Policy in Canada

Inflation and Disinflation

Unemployment Fluctuations and the Nairu

Government Debt and Deficits

The Gains From International Trade

Trade Policy

Exchange Rates and the Balance of Payments

Filters

Exam 19: What Macroeconomics Is All About

If the price index is P1 in one year and P2 in the next year,the inflation rate from one year to the next is calculated as

The most common measure of productivity is ________,which can be measured as real GDP divided by ________.

What is potential or full-employment output?

Which of the following macroeconomic variables in Canada display a significant long-run trend over recent decades? 1.real GDP 2.the price level 3.the unemployment rate

In macroeconomics,if the value of the national product increases,there is

If the cyclical unemployment rate is negative,then the

Most economists believe the single largest cause of rising material living standards over long periods of time is

In general,productivity is a measure of

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms. TABLE 19-1 Refer to Table 19-1.In which years was this economy experiencing an inflationary gap?

It is important for policymakers to recognize that most macroeconomic variables are characterized by

Workers with experience and skills sometimes lose their jobs and become unemployed due to changing technology or market conditions,even while firms in other industries or regions are looking to hire more workers.This type of unemployment is called

If one Canadian dollar can be exchanged for 0.5 euros,we say that the Canadian-euro exchange rate is

The price level is measured in some time period with an index number,such as the number 118.6.How is such a number of use to us?

If 0.75 U.S.dollars can be exchanged for one Canadian dollar,we say that the Canadian-U.S.exchange rate is

If the Consumer Price Index changes from 120 in year one to 122 in year two,the rate of inflation in the intervening year is

If a country's labour force is 15 million people,and 1 million of those are unemployed,the country's unemployment rate is

Changes in productivity can be analyzed by looking at how GDP per employed worker changes over time or how GDP per hour worked changes over time.Why might one measure be more preferable than the other?

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms. TABLE 19-1 Refer to Table 19-1.What is the output gap in 2013?

The real rate of interest is equal to the nominal interest rate

Suppose a country's population is 30 million and it has a labour force of 15 million people.If there are 1.35 million people unemployed,the country's unemployment rate is

Economic Issues and Concepts

Economic Theories, data, and Graphs

Demand, supply, and Price

The Measurement of National Income

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Real Gdp and the Price Level in the Short Run

From the Short Run to the Long Run: the Adjustment of Factor Prices

Long-Run Economic Growth

Money and Banking

Money, interest Rates, and Economic Activity

Monetary Policy in Canada

Inflation and Disinflation

Unemployment Fluctuations and the Nairu

Government Debt and Deficits

The Gains From International Trade

Trade Policy

Exchange Rates and the Balance of Payments

Filters

If the price index is P₁ in one year and P₂ in the next year,the inflation rate from one year to the next is calculated as

The most common measure of productivity is ,which can be measured as real GDP divided by .