Question 1

Short-run fluctuations in real GDP around its trend value are

Accepted Answer

A) generally ignored by economists,because these fluctuations do not affect behaviour of other variables such as the unemployment rate. 
B) generally ignored by economists,because these fluctuations are constant and predictable. 
C) referred to in economics as ʺbackground noise.ʺ 
D) referred to in economics as ʺthe business cycle.ʺ 
E) unimportant to the study of macroeconomics. 
A) generally ignored by economists,because these fluctuations do not affect behaviour of other variables such as the unemployment rate. 
B) generally ignored by economists,because these fluctuations are constant and predictable. 
C) referred to in economics as ʺbackground noise.ʺ 
D) referred to in economics as ʺthe business cycle.ʺ 
E) unimportant to the study of macroeconomics.

Question 2

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

Accepted Answer

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

Question 3

Which of the following is the best example of frictional unemployment?

Accepted Answer

A) A worker is laid off because his firm has to reduce production due to reduced demand. 
B) A worker quits her current job to search for a better one. 
C) An ironworker cannot find a job in Ottawa because all job vacancies are in Alberta. 
D) Bank tellers are unable to find jobs due to technological advances in the banking system. 
E) Inflationary pressures have led to higher wages for all jobs. 
A) A worker is laid off because his firm has to reduce production due to reduced demand. 
B) A worker quits her current job to search for a better one. 
C) An ironworker cannot find a job in Ottawa because all job vacancies are in Alberta. 
D) Bank tellers are unable to find jobs due to technological advances in the banking system. 
E) Inflationary pressures have led to higher wages for all jobs.

Question 4

During the 1970s,Canada experienced an unusual pattern of interest rates.During this period

Accepted Answer

A) the nominal interest rate was less than the real interest rate. 
B) the inflation rate was negative,implying a real interest rate that was higher than the nominal interest rate. 
C) the inflation rate exceeded the nominal interest rate,implying a negative real interest rate. 
D) the inflation rate was negative,implying a nominal interest rate higher than the real interest rate. 
E) the nominal and real interest rates were equal to each other. 
A) the nominal interest rate was less than the real interest rate. 
B) the inflation rate was negative,implying a real interest rate that was higher than the nominal interest rate. 
C) the inflation rate exceeded the nominal interest rate,implying a negative real interest rate. 
D) the inflation rate was negative,implying a nominal interest rate higher than the real interest rate. 
E) the nominal and real interest rates were equal to each other.

Question 5

Suppose that a countryʹs population is 30 million and it has a labour force of 15 million people.Assuming it has 1.35 million people unemployed,the countryʹs 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%.

Question 6

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 2010?

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 7

Consider the situations of a lender of money and a borrower of money.Which of the following situations is least burdensome for the borrower?

Accepted Answer

A) nominal interest rate of 15% and an inflation rate of 8% 
B) nominal interest rate of 10% and an inflation rate of 1% 
C) nominal interest rate of 8% and an inflation rate of 2% 
D) nominal interest rate of 4% and an inflation rate of 4% 
E) nominal interest rate of 29% and an inflation rate of 21% 
A) nominal interest rate of 15% and an inflation rate of 8% 
B) nominal interest rate of 10% and an inflation rate of 1% 
C) nominal interest rate of 8% and an inflation rate of 2% 
D) nominal interest rate of 4% and an inflation rate of 4% 
E) nominal interest rate of 29% and an inflation rate of 21%

Question 8

What is the approximate measure (2014 data)of Canadaʹs productivity in terms of real GDP per hour worked (expressed in 2007 dollars)?

Accepted Answer

A) $10 
B) $92 
C) $200 
D) $475 
E) $45 
A) $10 
B) $92 
C) $200 
D) $475 
E) $45

Question 9

In general,productivity is a measure of

Accepted Answer

A) the economyʹs 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 economyʹs 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 10

Canadaʹs unemployment rate has been as low as ________ in the 1960s and as high as ________ during the recession in the early 1980s.

Accepted Answer

A) 4.6; 14 
B) 2.0; 15 
C) 5.5; 17 
D) 2.4; 10 
E) 3.4; 12 
A) 4.6; 14 
B) 2.0; 15 
C) 5.5; 17 
D) 2.4; 10 
E) 3.4; 12

Question 11

To compare the economyʹs aggregate output in two different time periods,economists compare the

Accepted Answer

A) nominal national income for the two periods. 
B) potential national incomes for the two periods. 
C) real national income for the two periods. 
D) unemployment rates for the two periods. 
E) inflation rates for the two periods. 
A) nominal national income for the two periods. 
B) potential national incomes for the two periods. 
C) real national income for the two periods. 
D) unemployment rates for the two periods. 
E) inflation rates for the two periods.

Question 12

Suppose Canadaʹs exchange rate with the U.S. dollar falls from 1.21 to 1.13. This fall indicates a(n) ________ of the Canadian dollar, which means it takes ________ Canadian dollars to purchase one U.S. dollar.

Accepted Answer

A) appreciation; more 
B) appreciation; fewer 
C) depreciation; more 
D) depreciation; fewer 
A) appreciation; more 
B) appreciation; fewer 
C) depreciation; more 
D) depreciation; fewer

Question 13

On a graph showing real national income on the vertical axis and time on the horizontal axis,the trend -line would probably be a good approximation of the

Accepted Answer

A) business cycle. 
B) distribution of income. 
C) inflation rate. 
D) path of potential output. 
E) unemployment rate. 
A) business cycle. 
B) distribution of income. 
C) inflation rate. 
D) path of potential output. 
E) unemployment rate.

Question 14

Which of the following is the best example of cyclical unemployment?

Accepted Answer

A) A worker is laid off because his firm had to reduce production due to reduced demand. 
B) A worker quits her current job to search for a better one. 
C) An ironworker cannot find a job in Ottawa because all job vacancies are in Alberta. 
D) Bank tellers are unable to find jobs due to technological advances in the banking system. 
E) Inflationary pressures have led to higher wages for all jobs. 
A) A worker is laid off because his firm had to reduce production due to reduced demand. 
B) A worker quits her current job to search for a better one. 
C) An ironworker cannot find a job in Ottawa because all job vacancies are in Alberta. 
D) Bank tellers are unable to find jobs due to technological advances in the banking system. 
E) Inflationary pressures have led to higher wages for all jobs.

Exam 19: What Macroeconomics Is All About

Short-run fluctuations in real GDP around its trend value are

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

Which of the following is the best example of frictional unemployment?

During the 1970s,Canada experienced an unusual pattern of interest rates.During this period

Suppose that a countryʹs population is 30 million and it has a labour force of 15 million people.Assuming it has 1.35 million people unemployed,the countryʹs unemployment rate is

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 2010?

Consider the situations of a lender of money and a borrower of money.Which of the following situations is least burdensome for the borrower?

What is the approximate measure (2014 data)of Canadaʹs productivity in terms of real GDP per hour worked (expressed in 2007 dollars)?

In general,productivity is a measure of

Canadaʹs unemployment rate has been as low as ________ in the 1960s and as high as ________ during the recession in the early 1980s.

To compare the economyʹs aggregate output in two different time periods,economists compare the

Suppose Canadaʹs exchange rate with the U.S. dollar falls from 1.21 to 1.13. This fall indicates a(n) ________ of the Canadian dollar, which means it takes ________ Canadian dollars to purchase one U.S. dollar.

On a graph showing real national income on the vertical axis and time on the horizontal axis,the trend -line would probably be a good approximation of the

Which of the following is the best example of cyclical unemployment?

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

Canadaʹs unemployment rate has been as low as in the 1960s and as high as during the recession in the early 1980s.

Suppose Canadaʹs exchange rate with the U.S. dollar falls from 1.21 to 1.13. This fall indicates a(n) of the Canadian dollar, which means it takes Canadian dollars to purchase one U.S. dollar.