Question 1

Which of the following is illustrated by the circular flow of income?

Accepted Answer

A) the flows of expenditures and income in a household 
B) that firms own the factors of production 
C) the interaction of households and firms through the factors and goods markets 
D) that the flow of payments moves in the same direction as the flow of goods 
E) that there is no relationship between goods markets and factor markets 
A) the flows of expenditures and income in a household 
B) that firms own the factors of production 
C) the interaction of households and firms through the factors and goods markets 
D) that the flow of payments moves in the same direction as the flow of goods 
E) that there is no relationship between goods markets and factor markets

Question 2

An economic system that relies primarily upon custom and habit in economic decision making is referred to as a

Accepted Answer

A) market system. 
B) traditional system. 
C) command system. 
D) mixed system. 
E) communist system. 
A) market system. 
B) traditional system. 
C) command system. 
D) mixed system. 
E) communist system.

Question 3

Suppose drought destroys many millions of acres of valuable Canadian farmland.The effect on the Canadian economy would be to move

Accepted Answer

A) it along its production possibilities boundary. 
B) its production possibilities boundary inward. 
C) it beyond its production possibilities boundary. 
D) its production possibilities boundary outward. 
E) None of the above.There would be no change in Canadaʹs production possibilities boundary. 
A) it along its production possibilities boundary. 
B) its production possibilities boundary inward. 
C) it beyond its production possibilities boundary. 
D) its production possibilities boundary outward. 
E) None of the above.There would be no change in Canadaʹs production possibilities boundary.

Question 4

The downward-sloping line in the diagram below shows the combinations of health care and education expenditures that the government can afford with a given amount of tax revenue.
   FIGURE 1-6
-Refer to Figure 1-6.Suppose the governmentʹs current spending is shown by point D.In this case,

Accepted Answer

A) the government is not spending its total budget. 
B) more education expenditures can be achieved only by sacrificing some health expenditures. 
C) more health expenditures can be achieved only by sacrificing some education expenditures. 
D) the government should spend its total budget so as to get to point B,since more health spending and more education spending are both clearly desirable. 
E) the prices of education and health care have increased beyond the governmentʹs ability to pay. 
A) the government is not spending its total budget. 
B) more education expenditures can be achieved only by sacrificing some health expenditures. 
C) more health expenditures can be achieved only by sacrificing some education expenditures. 
D) the government should spend its total budget so as to get to point B,since more health spending and more education spending are both clearly desirable. 
E) the prices of education and health care have increased beyond the governmentʹs ability to pay.

Which of the following is illustrated by the circular flow of income?

An economic system that relies primarily upon custom and habit in economic decision making is referred to as a

Suppose drought destroys many millions of acres of valuable Canadian farmland.The effect on the Canadian economy would be to move

The downward-sloping line in the diagram below shows the combinations of health care and education expenditures that the government can afford with a given amount of tax revenue. FIGURE 1-6 -Refer to Figure 1-6.Suppose the governmentʹs current spending is shown by point D.In this case,

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

What Macroeconomics Is All About

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

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Exam 1: Economic Issues and Concepts

Which of the following is illustrated by the circular flow of income?

An economic system that relies primarily upon custom and habit in economic decision making is referred to as a

Suppose drought destroys many millions of acres of valuable Canadian farmland.The effect on the Canadian economy would be to move

The downward-sloping line in the diagram below shows the combinations of health care and education expenditures that the government can afford with a given amount of tax revenue. FIGURE 1-6 -Refer to Figure 1-6.Suppose the governmentʹs current spending is shown by point D.In this case,

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

What Macroeconomics Is All About

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