Question 1

Data collected of several variables but for the same time period are called

Accepted Answer

A) time- series data. 
B) logarithmic data. 
C) topographic data. 
D) cross- sectional data. 
E) time- analysis data. 
A) time- series data. 
B) logarithmic data. 
C) topographic data. 
D) cross- sectional data. 
E) time- analysis data. D

Question 2

In order to test a theory, one must

Accepted Answer

A) present a series of normative statements and positive statements. 
B) confront the predictions of the theory with evidence. 
C) develop normative statements from the law of large numbers. 
D) develop a better explanation than the one presented. 
E) use assumptions that most closely reflect reality. 
A) present a series of normative statements and positive statements. 
B) confront the predictions of the theory with evidence. 
C) develop normative statements from the law of large numbers. 
D) develop a better explanation than the one presented. 
E) use assumptions that most closely reflect reality. B

Question 3

The statement that a country's rate of GDP growth is influenced by individuals' saving behaviour is an example of a(n)

Accepted Answer

A) economic law. 
B) theory. 
C) prediction. 
D) variable. 
E) normative statement. 
A) economic law. 
B) theory. 
C) prediction. 
D) variable. 
E) normative statement. B

Question 4

If Y is an increasing function of X, then

Accepted Answer

A) Y decreases when X increases. 
B) X decreases when Y increases. 
C) X remains constant as Y increases. 
D) Y increases when X decreases. 
E) Y increases when X increases. 
A) Y decreases when X increases. 
B) X decreases when Y increases. 
C) X remains constant as Y increases. 
D) Y increases when X decreases. 
E) Y increases when X increases.

Question 5

When an increase in one variable is associated with a decrease in a second variable, the two variables are

Accepted Answer

A) positively related. 
B) inversely proportionally related. 
C) equivalent. 
D) proportionally related. 
E) negatively related. 
A) positively related. 
B) inversely proportionally related. 
C) equivalent. 
D) proportionally related. 
E) negatively related.

Question 6

If we seek to explain the number of seats sold on a particular air route, say Toronto to Halifax, over a one- year period, we would consider many variables. Which of the following variables would be endogenous to our theory?

Accepted Answer

A) the unemployment rate in Toronto. 
B) the number of fog days in Halifax. 
C) the number of airline seats sold on this route. 
D) the world price of oil. 
E) the price of the same trip by train 
A) the unemployment rate in Toronto. 
B) the number of fog days in Halifax. 
C) the number of airline seats sold on this route. 
D) the world price of oil. 
E) the price of the same trip by train

Question 7

Which of the following is a normative statement?

Accepted Answer

A) Tuition fees should be waived for low- income students. 
B) A free- trade agreement between two countries will result in an increase in trade. 
C) The higher is the level of taxes, the higher are wage demands. 
D) A reduction in export taxes on petroleum would result in higher wages. 
E) The higher is the level of taxes, the lower is consumption spending. 
A) Tuition fees should be waived for low- income students. 
B) A free- trade agreement between two countries will result in an increase in trade. 
C) The higher is the level of taxes, the higher are wage demands. 
D) A reduction in export taxes on petroleum would result in higher wages. 
E) The higher is the level of taxes, the lower is consumption spending.

Question 8

Let 1 stand for "any given period" and 2 stand for "base period". The formula of any index number can be written as:

Accepted Answer

A) value of index at 1 = absolute value at 1  absolute value at 2 
B) value of index at 1 = relative value at 1 × 100 relative value at 2 
C) value of index at 1 = relative value at 1  relative value at 2 
D) value of index at 1 = absolute value at 2 × 100 absolute value at 1 
A) value of index at 1 = absolute value at 1  absolute value at 2 
B) value of index at 1 = relative value at 1 × 100 relative value at 2 
C) value of index at 1 = relative value at 1  relative value at 2 
D) value of index at 1 = absolute value at 2 × 100 absolute value at 1

Question 9

Consider the line which is the graph of the function Y = 60 - 4X. The slope of this line is

Accepted Answer

A) 60. 
B) - 2.5. 
C) - 40. 
D) - 4.0. 
E) 4. 
A) 60. 
B) - 2.5. 
C) - 40. 
D) - 4.0. 
E) 4.

Question 10

For a given year, an index number of average prices (such as the Consumer Price Index)is the ratio of the

Accepted Answer

A) price of several goods in the given year to that in the base year. 
B) average price of several goods in the base year to that in the given year. 
C) average price of all goods in the given year to that in the base year. 
D) weighted prices of a typical bundle of goods purchased in a given year to that in the base year. 
E) weighted prices of a typical bundle of goods purchased in the base year to that in the given year. 
A) price of several goods in the given year to that in the base year. 
B) average price of several goods in the base year to that in the given year. 
C) average price of all goods in the given year to that in the base year. 
D) weighted prices of a typical bundle of goods purchased in a given year to that in the base year. 
E) weighted prices of a typical bundle of goods purchased in the base year to that in the given year.

Question 11

Suppose point A represents coordinates (X = 2, Y = 12)and point B represents coordinates (X = 6, Y = 4). The slope of the straight line joining points A and B is

Accepted Answer

A) - 2. 
B) 5. 
C) 2. 
D) -  1 . 
E)  1 . 2 2 
A) - 2. 
B) 5. 
C) 2. 
D) -  1 . 
E)  1 . 2 2

Question 12

At the minimum or the maximum of the graph of a non- linear function (with x on the horizontal axis and y on the vertical axis)the marginal response of y to a small change in x is

Accepted Answer

A) 0 
B) 1 
C) infinite 
D) undefined 
E) - 1 
A) 0 
B) 1 
C) infinite 
D) undefined 
E) - 1

Question 13

As a science, economics is disadvantaged in that

Accepted Answer

A) it is usually not possible to conduct controlled experiments in economics, in contrast with certain other sciences. 
B) some economic variables are determined within the theory. 
C) economic hypotheses cannot be accepted with complete certainty, by contrast with the other sciences. 
D) it deals with human behaviour and thus is not open to empirical testing. 
E) economic variables do not change enough to provide reliable data for testing hypotheses. 
A) it is usually not possible to conduct controlled experiments in economics, in contrast with certain other sciences. 
B) some economic variables are determined within the theory. 
C) economic hypotheses cannot be accepted with complete certainty, by contrast with the other sciences. 
D) it deals with human behaviour and thus is not open to empirical testing. 
E) economic variables do not change enough to provide reliable data for testing hypotheses.

Question 14

Suppose there is a theory that several things influence the price of fish in Halifax, one of which is the weather during the fishing season. When examining the determinants of the price of fish, the weather is

Accepted Answer

A) a stock, as it influences the quantity of fish caught. 
B) an endogenous variable, as it influences the price of fish. 
C) an endogenous variable, as it is determined within the theory. 
D) an exogenous variable, as it is determined outside the theory. 
E) an act of God and, therefore, has no legitimate connection with the theory. 
A) a stock, as it influences the quantity of fish caught. 
B) an endogenous variable, as it influences the price of fish. 
C) an endogenous variable, as it is determined within the theory. 
D) an exogenous variable, as it is determined outside the theory. 
E) an act of God and, therefore, has no legitimate connection with the theory.

Question 15

Of the following, which is the most important characteristic of a successful theory?

Accepted Answer

A) the theory could never be refuted. 
B) the theory allows us to predict behaviour reasonably accurately. 
C) all assumptions on which the theory is based are true. 
D) the theory adequately explains all economic behaviour. 
E) the theory provides a basis for facts about economic behaviour. 
A) the theory could never be refuted. 
B) the theory allows us to predict behaviour reasonably accurately. 
C) all assumptions on which the theory is based are true. 
D) the theory adequately explains all economic behaviour. 
E) the theory provides a basis for facts about economic behaviour.

Question 16

Which of the following statements is NOT correct?

Accepted Answer

A) Exposing them to empirical evidence can best test positive statements. 
B) Economic statements cannot be tested because human decisions involve free will. 
C) Economists test their theories by confronting the predictions of their theories with the evidence drawn from the real world. 
D) Economic predictions will be fulfilled when their underlying hypotheses conform to actual human behaviour. 
E) Normative statements cannot be tested by the scientific method. 
A) Exposing them to empirical evidence can best test positive statements. 
B) Economic statements cannot be tested because human decisions involve free will. 
C) Economists test their theories by confronting the predictions of their theories with the evidence drawn from the real world. 
D) Economic predictions will be fulfilled when their underlying hypotheses conform to actual human behaviour. 
E) Normative statements cannot be tested by the scientific method.

Question 17

When an economist assumes that the owners of firms are motivated only by the desire to maximize profits, the economist most likely believes that

Accepted Answer

A) it doesn't matter whether or not the assumption is descriptively accurate; what matters is whether a theory built on the assumption predicts well. 
B) all people enter business for their own selfish gain. 
C) individuals entering business are quite narrow in their personal objectives. 
D) the assumption is inaccurate, since surveys have been taken and the owners of firms have admitted that they care about more than just profits. 
E) the assumption is descriptively accurate, since surveys have been taken and the owners of firms have admitted that their only objective is to maximize profits. 
A) it doesn't matter whether or not the assumption is descriptively accurate; what matters is whether a theory built on the assumption predicts well. 
B) all people enter business for their own selfish gain. 
C) individuals entering business are quite narrow in their personal objectives. 
D) the assumption is inaccurate, since surveys have been taken and the owners of firms have admitted that they care about more than just profits. 
E) the assumption is descriptively accurate, since surveys have been taken and the owners of firms have admitted that their only objective is to maximize profits.

Question 18

An economic model that contains a highly realistic set of assumptions is

Accepted Answer

A) necessarily better able to predict the future. 
B) superior to a model whose assumptions are highly unrealistic. 
C) more abstract than a model whose assumptions are further removed from reality. 
D) useful because there is then very little difference between "theory" and "reality". 
E) not likely to be useful because of its particularized nature and its intractability. 
A) necessarily better able to predict the future. 
B) superior to a model whose assumptions are highly unrealistic. 
C) more abstract than a model whose assumptions are further removed from reality. 
D) useful because there is then very little difference between "theory" and "reality". 
E) not likely to be useful because of its particularized nature and its intractability.

Question 19

Suppose an individual wheat farmer's income is influenced by the region's average daily temperature. When examining the determinants of individual farmer income, the average daily temperature is a(n) variable.

Accepted Answer

A) flow 
B) induced 
C) dependent 
D) endogenous 
E) exogenous 
A) flow 
B) induced 
C) dependent 
D) endogenous 
E) exogenous

Question 20

Economics is scientific because

Accepted Answer

A) economists can conduct controlled experiments. 
B) it tests hypotheses by appealing to evidence. 
C) economists use data. 
D) individual behaviour is predictable. 
E) economists can conduct laboratory experiments. 
A) economists can conduct controlled experiments. 
B) it tests hypotheses by appealing to evidence. 
C) economists use data. 
D) individual behaviour is predictable. 
E) economists can conduct laboratory experiments.

Data collected of several variables but for the same time period are called

In order to test a theory, one must

The statement that a country's rate of GDP growth is influenced by individuals' saving behaviour is an example of a(n)

If Y is an increasing function of X, then

When an increase in one variable is associated with a decrease in a second variable, the two variables are

If we seek to explain the number of seats sold on a particular air route, say Toronto to Halifax, over a one- year period, we would consider many variables. Which of the following variables would be endogenous to our theory?

Which of the following is a normative statement?

Let 1 stand for "any given period" and 2 stand for "base period". The formula of any index number can be written as:

Consider the line which is the graph of the function Y = 60 - 4X. The slope of this line is

For a given year, an index number of average prices (such as the Consumer Price Index)is the ratio of the

Suppose point A represents coordinates (X = 2, Y = 12)and point B represents coordinates (X = 6, Y = 4). The slope of the straight line joining points A and B is

At the minimum or the maximum of the graph of a non- linear function (with x on the horizontal axis and y on the vertical axis)the marginal response of y to a small change in x is

As a science, economics is disadvantaged in that

Suppose there is a theory that several things influence the price of fish in Halifax, one of which is the weather during the fishing season. When examining the determinants of the price of fish, the weather is

Of the following, which is the most important characteristic of a successful theory?

Which of the following statements is NOT correct?

When an economist assumes that the owners of firms are motivated only by the desire to maximize profits, the economist most likely believes that

An economic model that contains a highly realistic set of assumptions is

Suppose an individual wheat farmer's income is influenced by the region's average daily temperature. When examining the determinants of individual farmer income, the average daily temperature is a(n) variable.

Economics is scientific because

Economic Issues and Concepts

Demand, Supply, and Price

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

The Difference Between Short-Run and Long-Run Macroeconomics

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 2: Economic Theories, Data, and Graphs

Data collected of several variables but for the same time period are called

In order to test a theory, one must

The statement that a country's rate of GDP growth is influenced by individuals' saving behaviour is an example of a(n)

If Y is an increasing function of X, then

When an increase in one variable is associated with a decrease in a second variable, the two variables are

If we seek to explain the number of seats sold on a particular air route, say Toronto to Halifax, over a one- year period, we would consider many variables. Which of the following variables would be endogenous to our theory?

Which of the following is a normative statement?

Let 1 stand for "any given period" and 2 stand for "base period". The formula of any index number can be written as:

Consider the line which is the graph of the function Y = 60 - 4X. The slope of this line is

For a given year, an index number of average prices (such as the Consumer Price Index)is the ratio of the

Suppose point A represents coordinates (X = 2, Y = 12)and point B represents coordinates (X = 6, Y = 4). The slope of the straight line joining points A and B is

At the minimum or the maximum of the graph of a non- linear function (with x on the horizontal axis and y on the vertical axis)the marginal response of y to a small change in x is

As a science, economics is disadvantaged in that

Suppose there is a theory that several things influence the price of fish in Halifax, one of which is the weather during the fishing season. When examining the determinants of the price of fish, the weather is

Of the following, which is the most important characteristic of a successful theory?

Which of the following statements is NOT correct?

When an economist assumes that the owners of firms are motivated only by the desire to maximize profits, the economist most likely believes that

An economic model that contains a highly realistic set of assumptions is

Suppose an individual wheat farmer's income is influenced by the region's average daily temperature. When examining the determinants of individual farmer income, the average daily temperature is a(n) variable.

Economics is scientific because

Economic Issues and Concepts

Demand, Supply, and Price

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

The Difference Between Short-Run and Long-Run Macroeconomics

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