Question 1

Economists build models that abstract from the complexities of reality because

Accepted Answer

A) economists do not understand the real world. 
B) economists are not interested in reality. 
C) it is easier to do so. 
D) the complexities of reality are unimportant. 
E) they believe they gain a greater understanding of reality. 
A) economists do not understand the real world. 
B) economists are not interested in reality. 
C) it is easier to do so. 
D) the complexities of reality are unimportant. 
E) they believe they gain a greater understanding of reality.

Question 2

The slope of a straight line is necessarily

Accepted Answer

A) negative. 
B) zero. 
C) positive. 
D) constant. 
E) increasing as one moves up the line. 
A) negative. 
B) zero. 
C) positive. 
D) constant. 
E) increasing as one moves up the line.

Question 3

An index number expresses the value of a variable in any given period

Accepted Answer

A) as an absolute compared to the base period. 
B) as a percentage of its value in the base period. 
C) as a proportional weighted average. 
D) as an average of its value in the base period. 
E) as a weighted average. 
A) as an absolute compared to the base period. 
B) as a percentage of its value in the base period. 
C) as a proportional weighted average. 
D) as an average of its value in the base period. 
E) as a weighted average.

Question 4

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 slope of the curve is

Accepted Answer

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

Question 5

Choose the statement that best describes how endogenous variables differ from exogenous variables.

Accepted Answer

A) An endogenous variable is a function of the exogenous variable, and both are stock variables. 
B) An endogenous variable is explained outside the theory and influences an exogenous variable while an exogenous variable is explained within the theory. 
C) An endogenous variable is explained within the theory, while an exogenous variable influences the endogenous variables but is determined outside the theory. 
D) An exogenous variable is a function of the endogenous variable, and both are flow variables. 
E) An endogenous variable is a flow, while an exogenous variable is a stock. 
A) An endogenous variable is a function of the exogenous variable, and both are stock variables. 
B) An endogenous variable is explained outside the theory and influences an exogenous variable while an exogenous variable is explained within the theory. 
C) An endogenous variable is explained within the theory, while an exogenous variable influences the endogenous variables but is determined outside the theory. 
D) An exogenous variable is a function of the endogenous variable, and both are flow variables. 
E) An endogenous variable is a flow, while an exogenous variable is a stock.

Question 6

Which of the following pairs of words have similar meanings?

Accepted Answer

A) induced and exogenous 
B) dependent and exogenous 
C) independent and exogenous 
D) induced and autonomous 
E) endogenous and autonomous 
A) induced and exogenous 
B) dependent and exogenous 
C) independent and exogenous 
D) induced and autonomous 
E) endogenous and autonomous

Question 7

The statement that introducing a policy of legislated rent controls will lead to a housing shortage is an example of a(n)

Accepted Answer

A) model. 
B) normative statement. 
C) theory. 
D) prediction. 
E) assumption. 
A) model. 
B) normative statement. 
C) theory. 
D) prediction. 
E) assumption.

Question 8

An economic hypothesis will be rejected when

Accepted Answer

A) the possibility of error has been completely eliminated. 
B) a single empirical observation is encountered in which its predictions fail. 
C) the probability that it is wrong, based on repeated empirical observations, is judged to be unacceptably high. 
D) it is rejected by a single empirical observation. 
E) one or more of the assumptions on which it is based fails to conform with reality. 
A) the possibility of error has been completely eliminated. 
B) a single empirical observation is encountered in which its predictions fail. 
C) the probability that it is wrong, based on repeated empirical observations, is judged to be unacceptably high. 
D) it is rejected by a single empirical observation. 
E) one or more of the assumptions on which it is based fails to conform with reality.

Question 9

Positively related variables change such that as the value of one variable

Accepted Answer

A) decreases, the value of the other variable decreases. 
B) increases, the value of the other variable decreases. 
C) increases, the value of the other variable remains the same. 
D) decreases, the value of the other variable increases. 
E) decreases, the value of the other variable remains the same. 
A) decreases, the value of the other variable decreases. 
B) increases, the value of the other variable decreases. 
C) increases, the value of the other variable remains the same. 
D) decreases, the value of the other variable increases. 
E) decreases, the value of the other variable remains the same.

Question 10

If a theory's prediction is tested and rejected,

Accepted Answer

A) it is rejected with certainty, because it is not possible to reject a hypothesis that is actually true. 
B) a new hypothesis is usually suggested and tested. 
C) the statistical tolerance of risk for accepting a false hypothesis should be increased. 
D) inquiry into the matter should cease. 
E) the original data and assumptions should be discarded. 
A) it is rejected with certainty, because it is not possible to reject a hypothesis that is actually true. 
B) a new hypothesis is usually suggested and tested. 
C) the statistical tolerance of risk for accepting a false hypothesis should be increased. 
D) inquiry into the matter should cease. 
E) the original data and assumptions should be discarded.

Question 11

A theory

Accepted Answer

A) can only be tested with a controlled experiment. 
B) is designed to explain and predict what we observe. 
C) is used to impose order on the world. 
D) assumes definitions for variables. 
E) enables one to make prophesies about the future. 
A) can only be tested with a controlled experiment. 
B) is designed to explain and predict what we observe. 
C) is used to impose order on the world. 
D) assumes definitions for variables. 
E) enables one to make prophesies about the future.

Question 12

In a co- ordinate graph, with Y on the vertical axis and X on the horizontal axis, the variable X is positive and the variable Y is negative in the quadrant.

Accepted Answer

A) bottom, left 
B) top, right 
C) bottom, right 
D) top, left 
A) bottom, left 
B) top, right 
C) bottom, right 
D) top, left

Question 13

Suppose an economist tells you that, on average, people in Canada have too much personal debt. This is an example of a(n) statement.

Accepted Answer

A) normative 
B) independent 
C) autonomous 
D) positive 
E) induced 
A) normative 
B) independent 
C) autonomous 
D) positive 
E) induced

Question 14

The mathematical expression of a relationship between two or more variables is usually known as

Accepted Answer

A) a theory. 
B) a function. 
C) a definition. 
D) an observation. 
E) an assumption. 
A) a theory. 
B) a function. 
C) a definition. 
D) an observation. 
E) an assumption.

Question 15

Data collected repeatedly over successive periods of time are called

Accepted Answer

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

Question 16

Most economists believe that economics be made completely value- free, in part because it is to absolutely refute a theory on the basis of factual evidence.

Accepted Answer

A) can; possible 
B) can; impossible 
C) cannot; impossible 
D) will; necessary 
E) cannot; possible 
A) can; possible 
B) can; impossible 
C) cannot; impossible 
D) will; necessary 
E) cannot; possible

Question 17

For an index number of an average quantity or price, the weights used must add up to 1 for

Accepted Answer

A) neither a proportional- weights index nor an unweighted index. 
B) price indexes only. 
C) a proportional- weights index but not an unweighted index. 
D) an unweighted index but not a proportional- weights index. 
E) both a proportional- weights index and an unweighted index. 
A) neither a proportional- weights index nor an unweighted index. 
B) price indexes only. 
C) a proportional- weights index but not an unweighted index. 
D) an unweighted index but not a proportional- weights index. 
E) both a proportional- weights index and an unweighted index.

Question 18

Negatively related variables change such that as the value of one variable

Accepted Answer

A) increases, the value of the other decreases. 
B) decreases, the value of the other variable decreases. 
C) decreases, the value of the other variable remains the same. 
D) increases, the value of the other variable remains the same. 
E) increases, the value of the other variable increases. 
A) increases, the value of the other decreases. 
B) decreases, the value of the other variable decreases. 
C) decreases, the value of the other variable remains the same. 
D) increases, the value of the other variable remains the same. 
E) increases, the value of the other variable increases.

Question 19

When comparing the magnitude of changes in variables with different scales it is best to

Accepted Answer

A) express each variable as an index number. 
B) use only time- series data. 
C) express each variable as a logarithmic number. 
D) compare the absolute data on each variable. 
E) compare the relative data on each variable. 
A) express each variable as an index number. 
B) use only time- series data. 
C) express each variable as a logarithmic number. 
D) compare the absolute data on each variable. 
E) compare the relative data on each variable.

Question 20

An economist has data showing Canadian GDP for the years 1945- 2009. The best way to illustrate these data is

Accepted Answer

A) a logarithmic scale diagram. 
B) a cross- sectional bar- chart graph. 
C) a time- series line graph. 
D) a scatter diagram. 
E) a time- series pie chart. 
A) a logarithmic scale diagram. 
B) a cross- sectional bar- chart graph. 
C) a time- series line graph. 
D) a scatter diagram. 
E) a time- series pie chart.

Economists build models that abstract from the complexities of reality because

The slope of a straight line is necessarily

An index number expresses the value of a variable in any given period

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 slope of the curve is

Choose the statement that best describes how endogenous variables differ from exogenous variables.

Which of the following pairs of words have similar meanings?

The statement that introducing a policy of legislated rent controls will lead to a housing shortage is an example of a(n)

An economic hypothesis will be rejected when

Positively related variables change such that as the value of one variable

If a theory's prediction is tested and rejected,

A theory

In a co- ordinate graph, with Y on the vertical axis and X on the horizontal axis, the variable X is positive and the variable Y is negative in the quadrant.

Suppose an economist tells you that, on average, people in Canada have too much personal debt. This is an example of a(n) statement.

The mathematical expression of a relationship between two or more variables is usually known as

Data collected repeatedly over successive periods of time are called

Most economists believe that economics be made completely value- free, in part because it is to absolutely refute a theory on the basis of factual evidence.

For an index number of an average quantity or price, the weights used must add up to 1 for

Negatively related variables change such that as the value of one variable

When comparing the magnitude of changes in variables with different scales it is best to

An economist has data showing Canadian GDP for the years 1945- 2009. The best way to illustrate these data is

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

Economists build models that abstract from the complexities of reality because

The slope of a straight line is necessarily

An index number expresses the value of a variable in any given period

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 slope of the curve is

Choose the statement that best describes how endogenous variables differ from exogenous variables.

Which of the following pairs of words have similar meanings?

The statement that introducing a policy of legislated rent controls will lead to a housing shortage is an example of a(n)

An economic hypothesis will be rejected when

Positively related variables change such that as the value of one variable

If a theory's prediction is tested and rejected,

A theory

In a co- ordinate graph, with Y on the vertical axis and X on the horizontal axis, the variable X is positive and the variable Y is negative in the quadrant.

Suppose an economist tells you that, on average, people in Canada have too much personal debt. This is an example of a(n) statement.

The mathematical expression of a relationship between two or more variables is usually known as

Data collected repeatedly over successive periods of time are called

Most economists believe that economics be made completely value- free, in part because it is to absolutely refute a theory on the basis of factual evidence.

For an index number of an average quantity or price, the weights used must add up to 1 for

Negatively related variables change such that as the value of one variable

When comparing the magnitude of changes in variables with different scales it is best to

An economist has data showing Canadian GDP for the years 1945- 2009. The best way to illustrate these data is

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