Question 1

A change in the Consumer Price Index measures

Accepted Answer

A) a change in a specific absolute price. 
B) a change in quantities of commodities sold. 
C) a change in relative prices. 
D) a change in a broad average price over some particular time span. 
E) the change in gross domestic product. 
A) a change in a specific absolute price. 
B) a change in quantities of commodities sold. 
C) a change in relative prices. 
D) a change in a broad average price over some particular time span. 
E) the change in gross domestic product.

Question 2

Suppose a small city has a population of 100 000 and a labour force of 60 000.Employment is 55 000 and 5000 workers are unemployed.How many people are not in the labour force?

Accepted Answer

A) 40 000 
B) 35 000 
C) 30 000 
D) 5000 
E) 0 
A) 40 000 
B) 35 000 
C) 30 000 
D) 5000 
E) 0

Question 3

Which of the following correctly describes the meaning of the expression Y < Y*?

Accepted Answer

A) actual output is less than potential output - a recessionary gap 
B) potential output is less than actual output - a recessionary gap 
C) actual output is less than potential output - an inflationary gap 
D) potential output is less than actual output - an inflationary gap 
A) actual output is less than potential output - a recessionary gap 
B) potential output is less than actual output - a recessionary gap 
C) actual output is less than potential output - an inflationary gap 
D) potential output is less than actual output - an inflationary gap

Question 4

The Canadian exchange rate is defined to be the

Accepted Answer

A) number of Canadian dollars needed to buy one unit of foreign currency. 
B) number of ounces of gold it takes to buy one hundred Canadian dollars. 
C) system of quotas imposed on the international exchange of goods. 
D) term for foreign currencies or claims on foreign currencies. 
E) value of one Canadian dollar in terms of foreign currencies. 
A) number of Canadian dollars needed to buy one unit of foreign currency. 
B) number of ounces of gold it takes to buy one hundred Canadian dollars. 
C) system of quotas imposed on the international exchange of goods. 
D) term for foreign currencies or claims on foreign currencies. 
E) value of one Canadian dollar in terms of foreign currencies.

Question 5

A worker is considered unemployed if that worker has no job,is legally eligible to work,

Accepted Answer

A) and is actively searching for employment. 
B) and is not collecting unemployment insurance. 
C) whether the worker is looking for a job or is not looking for a job. 
D) but only if they previously held a job. 
E) but only if they were previously employed for at least three consecutive months. 
A) and is actively searching for employment. 
B) and is not collecting unemployment insurance. 
C) whether the worker is looking for a job or is not looking for a job. 
D) but only if they previously held a job. 
E) but only if they were previously employed for at least three consecutive months.

Question 6

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 7

In macroeconomics,what is the output gap?

Accepted Answer

A) the measure of output that could have been produced if the economy were fully employed 
B) the dead-weight loss of inflation 
C) the difference between nominal and real output 
D) the percentage change in real GDP 
E) the difference between Y and Y* 
A) the measure of output that could have been produced if the economy were fully employed 
B) the dead-weight loss of inflation 
C) the difference between nominal and real output 
D) the percentage change in real GDP 
E) the difference between Y and Y*

Question 8

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 9

It is important for policy makers 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 10

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) 2012,2013 
B) 2009,2010,2014 
C) 2011,2015 
D) 2009,2010,2011 
E) 2013,2014,2015 
A) 2012,2013 
B) 2009,2010,2014 
C) 2011,2015 
D) 2009,2010,2011 
E) 2013,2014,2015

Question 11

Which of the following is an equivalent term for ʺfull-employment outputʺ?

Accepted Answer

A) actual output 
B) long-run output 
C) gross national product (GNP) 
D) gross domestic product (GDP) 
E) potential output 
A) actual output 
B) long-run output 
C) gross national product (GNP) 
D) gross domestic product (GDP) 
E) potential output

Question 12

Real GDP measures

Accepted Answer

A) the constant-dollar value of the potential output of the nationʹs economy over the period of one year. 
B) the quantity of total output produced by the nationʹs economy over the period of one year. 
C) the fluctuations of national income around its long-term trend. 
D) the annual growth rate of real national income. 
E) the long-term trend in total output produced by the nationʹs economy. 
A) the constant-dollar value of the potential output of the nationʹs economy over the period of one year. 
B) the quantity of total output produced by the nationʹs economy over the period of one year. 
C) the fluctuations of national income around its long-term trend. 
D) the annual growth rate of real national income. 
E) the long-term trend in total output produced by the nationʹs economy.

Question 13

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 14

An equivalent term for ʺreal national incomeʺ is

Accepted Answer

A) nominal national income. 
B) current-dollar national income. 
C) constant-dollar national income. 
D) actual national income. 
E) potential national income. 
A) nominal national income. 
B) current-dollar national income. 
C) constant-dollar national income. 
D) actual national income. 
E) potential national income.

Question 15

the rate of unemployment.

Accepted Answer

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

Question 16

Suppose the city of Calgary has a population of 1 million,a labour force of 575 000,and employment equal to 545 000.We can conclude that for legal and various other reasons ________ people are excluded from the

Accepted Answer

A) 30 000 
B) 420 000 
C) 425 000 
D) 445 000 
E) 450 000 
A) 30 000 
B) 420 000 
C) 425 000 
D) 445 000 
E) 450 000

Question 17

Suppose actual output is less than potential output.If the output gap measures the output loss due to the failure to achieve full employment,it can generally be concluded that the larger this output gap,the

Accepted Answer

A) greater is the employment rate. 
B) greater is the unemployment rate. 
C) lower is frictional unemployment. 
D) lower the deadweight loss of unemployment. 
E) more upward pressure there is on prices. 
A) greater is the employment rate. 
B) greater is the unemployment rate. 
C) lower is frictional unemployment. 
D) lower the deadweight loss of unemployment. 
E) more upward pressure there is on prices.

Question 18

Consider a small economy with 2500 employed workers who worked a total of 5 million hours at an average wage of $40 per hour.Which of the following is the best measure of labour productivity in this economy?

Accepted Answer

A) real GDP per hour worked = $40 
B) real GDP per employed worker = $80 000 
C) real GDP per hour worked = $80 
D) real GDP per employed worker = $125 000 
E) Not able to determine from the information provided 
A) real GDP per hour worked = $40 
B) real GDP per employed worker = $80 000 
C) real GDP per hour worked = $80 
D) real GDP per employed worker = $125 000 
E) Not able to determine from the information provided

Question 19

If constant-dollar national income decreased by $6 billion over a one-year period,then it must be true that

Accepted Answer

A) output of every product decreased. 
B) the price level decreased. 
C) aggregate output decreased. 
D) aggregate output decreased and the price level increased. 
E) aggregate output increased and the price level decreased. 
A) output of every product decreased. 
B) the price level decreased. 
C) aggregate output decreased. 
D) aggregate output decreased and the price level increased. 
E) aggregate output increased and the price level decreased.

Question 20

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.

Exam 19: What Macroeconomics Is All About

A change in the Consumer Price Index measures

Suppose a small city has a population of 100 000 and a labour force of 60 000.Employment is 55 000 and 5000 workers are unemployed.How many people are not in the labour force?

Which of the following correctly describes the meaning of the expression Y < Y*?

The Canadian exchange rate is defined to be the

A worker is considered unemployed if that worker has no job,is legally eligible to work,

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

In macroeconomics,what is the output gap?

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

It is important for policy makers to recognize that most macroeconomic variables are characterized 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.In which years was this economy experiencing a recessionary gap?

Which of the following is an equivalent term for ʺfull-employment outputʺ?

Real GDP measures

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

An equivalent term for ʺreal national incomeʺ is

the rate of unemployment.

Suppose the city of Calgary has a population of 1 million,a labour force of 575 000,and employment equal to 545 000.We can conclude that for legal and various other reasons ________ people are excluded from the

Suppose actual output is less than potential output.If the output gap measures the output loss due to the failure to achieve full employment,it can generally be concluded that the larger this output gap,the

Consider a small economy with 2500 employed workers who worked a total of 5 million hours at an average wage of $40 per hour.Which of the following is the best measure of labour productivity in this economy?

If constant-dollar national income decreased by $6 billion over a one-year period,then it must be true that

If the cyclical unemployment rate is negative,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