Question 1

Which of the following is the best description of the business cycle?

Accepted Answer

A) the normal cycle of profits and losses by producers in the economy 
B) the short-run fluctuations of national income around its trend value 
C) a five-year period designed for national accounting purposes to capture the normal cycle of recession periods and boom periods 
D) a ten-year period designed for national accounting purposes to capture the normal cycle of recession periods and boom periods 
E) the fluctuations of one country's national income in comparison to another country's national income 
A) the normal cycle of profits and losses by producers in the economy 
B) the short-run fluctuations of national income around its trend value 
C) a five-year period designed for national accounting purposes to capture the normal cycle of recession periods and boom periods 
D) a ten-year period designed for national accounting purposes to capture the normal cycle of recession periods and boom periods 
E) the fluctuations of one country's national income in comparison to another country's national income

Question 2

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 the year 2017,it is probably the case that workers are ________ and factories are ________.

Accepted Answer

A) facing cyclical unemployment; facing temporary shut downs 
B) working longer than normal hours; facing temporary shutdowns 
C) experiencing zero unemployment; operating extra shifts 
D) experiencing zero unemployment; operating beyond their normal capacity 
E) working longer than normal hours; operating beyond their normal capacity 
A) facing cyclical unemployment; facing temporary shut downs 
B) working longer than normal hours; facing temporary shutdowns 
C) experiencing zero unemployment; operating extra shifts 
D) experiencing zero unemployment; operating beyond their normal capacity 
E) working longer than normal hours; operating beyond their normal capacity

Question 3

Suppose an employer and its employees enter into a wage contract specifying a wage increase of 2%.But suppose the price level rises by 3% over the course of the contract.In this case,

Accepted Answer

A) the employees' purchasing power will rise. 
B) the employees' purchasing power will fall. 
C) the employer will experience a greater fall in purchasing power than would have occurred if the price level had held steady. 
D) both employer and employees will benefit from increased purchasing power. 
E) both employer and employees will experience a loss of purchasing power. 
A) the employees' purchasing power will rise. 
B) the employees' purchasing power will fall. 
C) the employer will experience a greater fall in purchasing power than would have occurred if the price level had held steady. 
D) both employer and employees will benefit from increased purchasing power. 
E) both employer and employees will experience a loss of purchasing power.

Question 4

Why is real income for an average Canadian today so much higher than it was for an average Canadian 100 years ago?

Accepted Answer

A) Because of the increase in the labour force due to rising population,immigration and the increase in female labour-force participation. 
B) Primarily because productivity per worker is so much higher today than in the past. 
C) Because inflation has been maintained at relatively low levels throughout that time. 
D) Because free-trade agreements have vastly increased real incomes. 
E) Because the life span of the average worker has increased from about 55 years to about 80 years over that time period. 
A) Because of the increase in the labour force due to rising population,immigration and the increase in female labour-force participation. 
B) Primarily because productivity per worker is so much higher today than in the past. 
C) Because inflation has been maintained at relatively low levels throughout that time. 
D) Because free-trade agreements have vastly increased real incomes. 
E) Because the life span of the average worker has increased from about 55 years to about 80 years over that time period.

Question 5

In the study of short-run fluctuations in national income,potential income (output)is usually assumed to be

Accepted Answer

A) falling at its average growth rate. 
B) moving together with potential output in neighbouring countries. 
C) constant. 
D) equal to actual income. 
E) irrelevant,as the economy is rarely there. 
A) falling at its average growth rate. 
B) moving together with potential output in neighbouring countries. 
C) constant. 
D) equal to actual income. 
E) irrelevant,as the economy is rarely there.

Question 6

The three main reasons that Canada's real GDP has increased steadily for many years are

Accepted Answer

A) rising employment,increasing levels of education of the labour force and the increase in the participation rate of women in the labour force. 
B) an increasing stock of physical capital,increasing exports and rising employment. 
C) the increase in life expectancy,the rise in employment and increasing productivity. 
D) rising employment,increasing stock of physical capital and increasing productivity. 
E) increasing productivity of labour,increasing productivity of land and increasing productivity of the capital stock. 
A) rising employment,increasing levels of education of the labour force and the increase in the participation rate of women in the labour force. 
B) an increasing stock of physical capital,increasing exports and rising employment. 
C) the increase in life expectancy,the rise in employment and increasing productivity. 
D) rising employment,increasing stock of physical capital and increasing productivity. 
E) increasing productivity of labour,increasing productivity of land and increasing productivity of the capital stock.

Question 7

If nominal national income increased by 20% over a certain period of time while real national income increased by 10%,then

Accepted Answer

A) everybody in the economy became worse off. 
B) inflation has decreased during this time period. 
C) the labour force increased by 10%. 
D) the price level has declined by about 10%. 
E) the price level has increased by approximately 10%. 
A) everybody in the economy became worse off. 
B) inflation has decreased during this time period. 
C) the labour force increased by 10%. 
D) the price level has declined by about 10%. 
E) the price level has increased by approximately 10%.

Question 8

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 are the factors of production in this economy said to be "fully employed"?

Accepted Answer

A) 2012,2013,2017 
B) 2014,2018 
C) 2015,2016 
D) all years 
E) none of the years 
A) 2012,2013,2017 
B) 2014,2018 
C) 2015,2016 
D) all years 
E) none of the years

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 the year 2015,it is probably the case that workers are ________ and factories are ________.

Accepted Answer

A) facing cyclical unemployment; facing temporary shut downs 
B) working longer than normal hours; facing temporary shutdowns 
C) experiencing zero unemployment; operating extra shifts 
D) experiencing zero unemployment; operating beyond their normal capacity 
E) working longer than normal hours; operating beyond their normal capacity 
A) facing cyclical unemployment; facing temporary shut downs 
B) working longer than normal hours; facing temporary shutdowns 
C) experiencing zero unemployment; operating extra shifts 
D) experiencing zero unemployment; operating beyond their normal capacity 
E) working longer than normal hours; operating beyond their normal capacity

Question 10

Women entered the labour force in large numbers in the 20th century and increased the economy's GDP.This change

Accepted Answer

A) created inflationary gaps. 
B) created recessionary gaps. 
C) raised potential output. 
D) was only possible in an economy operating above normal rates of utilization. 
E) was only possible in an economy operating below normal rates of utilization. 
A) created inflationary gaps. 
B) created recessionary gaps. 
C) raised potential output. 
D) was only possible in an economy operating above normal rates of utilization. 
E) was only possible in an economy operating below normal rates of utilization.

Question 11

Consider a small economy with real GDP of $1 billion and the total number of hours worked equal to 5 million.Which of the following is the best measure of labour productivity in this economy?

Accepted Answer

A) real GDP per hour worked = $20 
B) real GDP per employed worker = $20 
C) real GDP per hour worked = $200 
D) real GDP per employed worker = $200 
E) Not able to determine from the information provided 
A) real GDP per hour worked = $20 
B) real GDP per employed worker = $20 
C) real GDP per hour worked = $200 
D) real GDP per employed worker = $200 
E) Not able to determine from the information provided

Question 12

Suppose Honest Rob's Used Cars buys a used car for $2000 and resells it for $3000.The result of Honest Rob's transactions is to

Accepted Answer

A) decrease the value of national income by $3000. 
B) decrease the value of national income by $1000. 
C) leave the value of national income unchanged. 
D) increase the value of national income by $1000. 
E) increase the value of national income by $3000. 
A) decrease the value of national income by $3000. 
B) decrease the value of national income by $1000. 
C) leave the value of national income unchanged. 
D) increase the value of national income by $1000. 
E) increase the value of national income by $3000.

Question 13

Workers with marketable skills sometimes quit a job and become unemployed,with the expectation of soon finding a better job.This type of unemployment is called

Accepted Answer

A) cyclical unemployment. 
B) frictional unemployment. 
C) historical unemployment. 
D) overly-optimistic unemployment. 
E) structural unemployment. 
A) cyclical unemployment. 
B) frictional unemployment. 
C) historical unemployment. 
D) overly-optimistic unemployment. 
E) structural unemployment.

Question 14

Suppose a price index for a certain basket of goods and services has a value of 150 in 2018 and a value of 156 in 2019.This index suggests that the cost of the market basket of goods and services

Accepted Answer

A) was 4% higher in 2019 than in 2018. 
B) was 6% lower in 2019 than in 2018. 
C) was 6% higher in 2019 than in 2018. 
D) was 156% higher in 2019 than in 2018. 
E) was approximately the same in 2019 and 2018. 
A) was 4% higher in 2019 than in 2018. 
B) was 6% lower in 2019 than in 2018. 
C) was 6% higher in 2019 than in 2018. 
D) was 156% higher in 2019 than in 2018. 
E) was approximately the same in 2019 and 2018.

Question 15

Cyclical unemployment is associated with which of the following?

Accepted Answer

A) changes to the economy's industrial structure resulting from growth in some industries and decline in others 
B) an output level different from the economy's potential output 
C) differences between the characteristics of the supply of labour and the demand for labour 
D) people entering the labour force typically take some time to find a job 
E) people quitting their present jobs to look for other jobs 
A) changes to the economy's industrial structure resulting from growth in some industries and decline in others 
B) an output level different from the economy's potential output 
C) differences between the characteristics of the supply of labour and the demand for labour 
D) people entering the labour force typically take some time to find a job 
E) people quitting their present jobs to look for other jobs

Question 16

If the price index is P1 in year 1 and P2 in year 3,the average inflation rate per year over this period is calculated as

Accepted Answer

A) (P2 - P1)× (100/2). 
B) [(P2 - P1)/P1] × 100. 
C) [(P2 - P1)/P1] × [100/2]. 
D) [(P1 - P2)/P2] × 100. 
E) [(P1 - P2)/P2] × [100/2]. 
A) (P2 - P1)× (100/2). 
B) [(P2 - P1)/P1] × 100. 
C) [(P2 - P1)/P1] × [100/2]. 
D) [(P1 - P2)/P2] × 100. 
E) [(P1 - P2)/P2] × [100/2].

Question 17

Consider a small economy with real GDP of $1 billion and the number of workers employed equal to 2500.Which of the following is the best measure of labour productivity in this economy?

Accepted Answer

A) real GDP per hour worked = $200 
B) real GDP per employed worker = $200 000 
C) real GDP per hour worked = $400 
D) real GDP per employed worker = $400 000 
E) Not able to determine from the information provided 
A) real GDP per hour worked = $200 
B) real GDP per employed worker = $200 000 
C) real GDP per hour worked = $400 
D) real GDP per employed worker = $400 000 
E) Not able to determine from the information provided

Question 18

Which of the following macroeconomic variables in Canada do NOT display a significant long-run trend over recent decades?

Accepted Answer

A) real GDP 
B) the price level 
C) the level of unemployment 
D) the unemployment rate 
E) the level of labour productivity 
A) real GDP 
B) the price level 
C) the level of unemployment 
D) the unemployment rate 
E) the level of labour productivity

Question 19

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 a recessionary gap?

Accepted Answer

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

Question 20

Consider a small economy with 3 individuals.Individual A produces 100 chickens that sell for $8 each.Individual B produces 50 bags of corn that sell for $10 each.Individual C produces 40 bushels of apples that sell for $20 each.National income in this economy is

Accepted Answer

A) 100 chickens plus 50 bags of corn plus 40 bushels of apples. 
B) 190 units of goods produced. 
C) $2100. 
D) $2470. 
E) not determinable from the information provided. 
A) 100 chickens plus 50 bags of corn plus 40 bushels of apples. 
B) 190 units of goods produced. 
C) $2100. 
D) $2470. 
E) not determinable from the information provided.

Which of the following is the best description of the business cycle?

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 the year 2017,it is probably the case that workers are and factories are .

Suppose an employer and its employees enter into a wage contract specifying a wage increase of 2%.But suppose the price level rises by 3% over the course of the contract.In this case,

Why is real income for an average Canadian today so much higher than it was for an average Canadian 100 years ago?

In the study of short-run fluctuations in national income,potential income (output)is usually assumed to be

The three main reasons that Canada's real GDP has increased steadily for many years are

If nominal national income increased by 20% over a certain period of time while real national income increased by 10%,then

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 are the factors of production in this economy said to be "fully employed"?

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 the year 2015,it is probably the case that workers are and factories are .

Women entered the labour force in large numbers in the 20^th century and increased the economy's GDP.This change

Consider a small economy with real GDP of $1 billion and the total number of hours worked equal to 5 million.Which of the following is the best measure of labour productivity in this economy?

Suppose Honest Rob's Used Cars buys a used car for $2000 and resells it for $3000.The result of Honest Rob's transactions is to

Workers with marketable skills sometimes quit a job and become unemployed,with the expectation of soon finding a better job.This type of unemployment is called

Suppose a price index for a certain basket of goods and services has a value of 150 in 2018 and a value of 156 in 2019.This index suggests that the cost of the market basket of goods and services

Cyclical unemployment is associated with which of the following?

If the price index is P₁ in year 1 and P₂ in year 3,the average inflation rate per year over this period is calculated as

Consider a small economy with real GDP of $1 billion and the number of workers employed equal to 2500.Which of the following is the best measure of labour productivity in this economy?

Which of the following macroeconomic variables in Canada do NOT display a significant long-run trend over recent decades?

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 a recessionary gap?

Consider a small economy with 3 individuals.Individual A produces 100 chickens that sell for $8 each.Individual B produces 50 bags of corn that sell for $10 each.Individual C produces 40 bushels of apples that sell for $20 each.National income in this economy 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

Which of the following is the best description of the business cycle?

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 the year 2017,it is probably the case that workers are ________ and factories are ________.

Suppose an employer and its employees enter into a wage contract specifying a wage increase of 2%.But suppose the price level rises by 3% over the course of the contract.In this case,

Why is real income for an average Canadian today so much higher than it was for an average Canadian 100 years ago?

In the study of short-run fluctuations in national income,potential income (output)is usually assumed to be

The three main reasons that Canada's real GDP has increased steadily for many years are

If nominal national income increased by 20% over a certain period of time while real national income increased by 10%,then

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 are the factors of production in this economy said to be "fully employed"?

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 the year 2015,it is probably the case that workers are ________ and factories are ________.

Women entered the labour force in large numbers in the 20th century and increased the economy's GDP.This change

Consider a small economy with real GDP of $1 billion and the total number of hours worked equal to 5 million.Which of the following is the best measure of labour productivity in this economy?

Suppose Honest Rob's Used Cars buys a used car for $2000 and resells it for $3000.The result of Honest Rob's transactions is to

Workers with marketable skills sometimes quit a job and become unemployed,with the expectation of soon finding a better job.This type of unemployment is called

Suppose a price index for a certain basket of goods and services has a value of 150 in 2018 and a value of 156 in 2019.This index suggests that the cost of the market basket of goods and services

Cyclical unemployment is associated with which of the following?

If the price index is P1 in year 1 and P2 in year 3,the average inflation rate per year over this period is calculated as

Consider a small economy with real GDP of $1 billion and the number of workers employed equal to 2500.Which of the following is the best measure of labour productivity in this economy?

Which of the following macroeconomic variables in Canada do NOT display a significant long-run trend over recent decades?

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 a recessionary gap?

Consider a small economy with 3 individuals.Individual A produces 100 chickens that sell for $8 each.Individual B produces 50 bags of corn that sell for $10 each.Individual C produces 40 bushels of apples that sell for $20 each.National income in this economy 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

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 the year 2017,it is probably the case that workers are and factories are .

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 the year 2015,it is probably the case that workers are and factories are .

Women entered the labour force in large numbers in the 20^th century and increased the economy's GDP.This change

If the price index is P₁ in year 1 and P₂ in year 3,the average inflation rate per year over this period is calculated as