Question 1

Consider the growth in Canadaʹs labour force and employment.Over the last 50 years,

Accepted Answer

A) the labour force has grown much more rapidly than employment. 
B) both the labour force and employment have remained roughly constant. 
C) the number of unemployed persons has been a much larger fraction of the labour force than it was during the first half of the 20th century. 
D) the main trend of the economy has been one of growth in employment that roughly matches the growth in the labour force. 
E) the main trend of the economy has been to have employment grow more rapidly than the growth in output. 
A) the labour force has grown much more rapidly than employment. 
B) both the labour force and employment have remained roughly constant. 
C) the number of unemployed persons has been a much larger fraction of the labour force than it was during the first half of the 20th century. 
D) the main trend of the economy has been one of growth in employment that roughly matches the growth in the labour force. 
E) the main trend of the economy has been to have employment grow more rapidly than the growth in output.

Question 2

Suppose Honest Robʹs Used Cars buys a used car for $2000 and resells it for $3000.The result of Honest Robʹs 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 3

Suppose a country has an unemployment rate of 20%.If we know that the population is 38 million and the labour force is 25 million,then the number of people unemployed is

Accepted Answer

A) 5 million. 
B) 13 million. 
C) 20 million. 
D) 7.6 million. 
E) 2.6 million. 
A) 5 million. 
B) 13 million. 
C) 20 million. 
D) 7.6 million. 
E) 2.6 million.

Question 4

Which of the following groups would benefit most in real terms from a period of high and unanticipated inflation,as was experienced in Canada in the early 1970s?

Accepted Answer

A) mortgage companies and banks who issued fixed -rate mortgages to clients 
B) banks with outstanding loans to their customers 
C) seniors whose income is largely interest earnings on past savings 
D) firms that maintain large cash balances for the operation of their business 
E) homeowners who had long-term fixed-rate mortgages 
A) mortgage companies and banks who issued fixed -rate mortgages to clients 
B) banks with outstanding loans to their customers 
C) seniors whose income is largely interest earnings on past savings 
D) firms that maintain large cash balances for the operation of their business 
E) homeowners who had long-term fixed-rate mortgages

Question 5

The three main reasons that Canadaʹs 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 6

Suppose the city of Calgary,Alberta has a population of 1 million,a labour force of 575 000,and employment is equal to 545 000.The unemployment rate in Calgary is approximately

Accepted Answer

A) 3.0%. 
B) 5.2%. 
C) 5.5%. 
D) 54.5%. 
E) 57.5%. 
A) 3.0%. 
B) 5.2%. 
C) 5.5%. 
D) 54.5%. 
E) 57.5%.

Question 7

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

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 What is the output gap in 2012?

Accepted Answer

A) $420 billion 
B) $418 billion 
C) -$2 billion 
D) -$20 billion 
E) $2 billion 
A) $420 billion 
B) $418 billion 
C) -$2 billion 
D) -$20 billion 
E) $2 billion

Question 9

The real interest rate must be

Accepted Answer

A) high if the nominal interest rate is high. 
B) high if the inflation rate is greater than the nominal interest rate. 
C) low if the nominal interest rate is high. 
D) positive if the nominal rate of interest is greater than the rate of inflation. 
E) negative if the nominal rate of interest is greater than the rate of inflation. 
A) high if the nominal interest rate is high. 
B) high if the inflation rate is greater than the nominal interest rate. 
C) low if the nominal interest rate is high. 
D) positive if the nominal rate of interest is greater than the rate of inflation. 
E) negative if the nominal rate of interest is greater than the rate of inflation.

Question 10

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 11

If a countryʹs population is 15 million people,and 1 million of those are unemployed,the countryʹs unemployment rate is

Accepted Answer

A) 2.5%. 
B) 3.3%. 
C) 6.7%. 
D) 7.1% 
E) There is not enough information to know. 
A) 2.5%. 
B) 3.3%. 
C) 6.7%. 
D) 7.1% 
E) There is not enough information to know.

Question 12

In macroeconomics,the term ʺnational incomeʺ refers to

Accepted Answer

A) all sales of both current production and used goods. 
B) only those sales of currently produced goods sold to other nations. 
C) the value of a nationʹs total wealth. 
D) the value of the income generated by the production of total output. 
E) total current spending by all households. 
A) all sales of both current production and used goods. 
B) only those sales of currently produced goods sold to other nations. 
C) the value of a nationʹs total wealth. 
D) the value of the income generated by the production of total output. 
E) total current spending by all households.

Question 13

If 27 million people are employed and 3 million people are unemployed,what is the unemployment rate?

Accepted Answer

A) 11% 
B) 89% 
C) 10% 
D) 90% 
E) Not able to determine from the information provided 
A) 11% 
B) 89% 
C) 10% 
D) 90% 
E) Not able to determine from the information provided

Question 14

Women entered the labour force in large numbers in the 20th century and increased the economyʹs 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 15

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 16

Since 1960,in Canada the price level has ,while the rate of inflation has .

Accepted Answer

A) fluctuated widely; been relatively stable 
B) fluctuated widely; also fluctuated widely 
C) been rising steadily; been quite volatile 
D) been rising steadily; been relatively stable 
E) been quite volatile; been rising steadily 
A) fluctuated widely; been relatively stable 
B) fluctuated widely; also fluctuated widely 
C) been rising steadily; been quite volatile 
D) been rising steadily; been relatively stable 
E) been quite volatile; been rising steadily

Question 17

Suppose Appliance Mart buys a used refrigerator for $100,repairs it,and resells it for $250.The result of this transaction is to

Accepted Answer

A) increase the value of national product by $250. 
B) leave the value of national product unchanged. 
C) increase the value of national product by $150. 
D) decrease the value of national product by $100. 
E) There is insufficient information to know. 
A) increase the value of national product by $250. 
B) leave the value of national product unchanged. 
C) increase the value of national product by $150. 
D) decrease the value of national product by $100. 
E) There is insufficient information to know.

Question 18

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 19

The group that tends to be most hurt by unexpected inflation is

Accepted Answer

A) banks. 
B) individuals with unindexed pensions. 
C) employers. 
D) fixed-income earners. 
E) both B and D are correct. 
A) banks. 
B) individuals with unindexed pensions. 
C) employers. 
D) fixed-income earners. 
E) both B and D are correct.

Question 20

If the cyclical unemployment rate is greater than zero,then the

Accepted Answer

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

Exam 19: What Macroeconomics Is All About

Consider the growth in Canadaʹs labour force and employment.Over the last 50 years,

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

Suppose a country has an unemployment rate of 20%.If we know that the population is 38 million and the labour force is 25 million,then the number of people unemployed is

Which of the following groups would benefit most in real terms from a period of high and unanticipated inflation,as was experienced in Canada in the early 1970s?

The three main reasons that Canadaʹs real GDP has increased steadily for many years are

Suppose the city of Calgary,Alberta has a population of 1 million,a labour force of 575 000,and employment is equal to 545 000.The unemployment rate in Calgary is approximately

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

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 2012?

The real interest rate must be

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

If a countryʹs population is 15 million people,and 1 million of those are unemployed,the countryʹs unemployment rate is

In macroeconomics,the term ʺnational incomeʺ refers to

If 27 million people are employed and 3 million people are unemployed,what is the unemployment rate?

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

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?

Since 1960,in Canada the price level has ,while the rate of inflation has .

Suppose Appliance Mart buys a used refrigerator for $100,repairs it,and resells it for $250.The result of this transaction is to

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

The group that tends to be most hurt by unexpected inflation is

If the cyclical unemployment rate is greater than zero,then the

Economic Issues and Concepts

Economic Theories, data, and Graphs

Demand, supply, and Price

Elasticity

Price Controls and Market Efficiency

Consumer Behaviour

Producers in the Short Run

Producers in the Long Run

Competitive Markets

Monopoly, cartels, and Price Discrimination

Imperfect Competition and Strategic Behaviour

Economic Efficiency and Public Policy

How Factor Markets Work

Labour Markets and Income Inequality

Market Failures and Government Intervention

The Economics of Environmental Protection

Taxation and Public Expenditure

The Measurement of National Income

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Output and Prices 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

Exchange Rates and the Balance of Payments

Filters

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