Question 1

Suppose that two points on a straight line are (X = 4, Y = 5), and (X = 2, Y = 1). The slope of this line is

Accepted Answer

A)  1 . 
B)  4 . 
C)  - 1 . 
D) - 2. 
E) 2. 2 5 2 
A)  1 . 
B)  4 . 
C)  - 1 . 
D) - 2. 
E) 2. 2 5 2

Question 2

An unweighted index number

Accepted Answer

A) has different weights for each data series depending on importance. 
B) has equal weights attached to different data series. 
C) has no weights attached to different data series. 
D) is not a real index number. 
E) can only be used for price indexes. 
A) has different weights for each data series depending on importance. 
B) has equal weights attached to different data series. 
C) has no weights attached to different data series. 
D) is not a real index number. 
E) can only be used for price indexes.

Question 3

Which of the following is a positive statement?

Accepted Answer

A) The higher the price for gasoline, the less of it will be consumed. 
B) Corporations in Canada should pay more taxes. 
C) Canada should reduce its imports of consumer goods. 
D) Substitutes for fossil fuels should be developed. 
E) There should be one price for gasoline throughout Canada. 
A) The higher the price for gasoline, the less of it will be consumed. 
B) Corporations in Canada should pay more taxes. 
C) Canada should reduce its imports of consumer goods. 
D) Substitutes for fossil fuels should be developed. 
E) There should be one price for gasoline throughout Canada.

Question 4

Value judgments

Accepted Answer

A) are subjective opinions that cannot be proven. 
B) should be the only basis for establishing public policies. 
C) are the basis for all economic models. 
D) can be tested and verified. 
E) are basically the same for all individuals. 
A) are subjective opinions that cannot be proven. 
B) should be the only basis for establishing public policies. 
C) are the basis for all economic models. 
D) can be tested and verified. 
E) are basically the same for all individuals.

Question 5

Index numbers make it possible to compare

Accepted Answer

A) movements in different variables measured in the same units. 
B) linear and logarithmic data. 
C) time- series data with cross- sectional data. 
D) government data with private- sector data. 
E) movements in different variables measured in different units. 
A) movements in different variables measured in the same units. 
B) linear and logarithmic data. 
C) time- series data with cross- sectional data. 
D) government data with private- sector data. 
E) movements in different variables measured in different units.

Question 6

On a coordinate graph, what is the Y intercept of the function X = 60 + 3Y?

Accepted Answer

A) 60 
B) 3.0 
C) 0.1 
D) - 20 
E) 20 
A) 60 
B) 3.0 
C) 0.1 
D) - 20 
E) 20

Question 7

A scatter diagram

Accepted Answer

A) plots a series of observations, showing the relationship between two variables. 
B) relates cross- sectional data only. 
C) is a graph of a theoretical relationship between two variables. 
D) relates time series data only. 
E) shows the dependence of one variable on another. 
A) plots a series of observations, showing the relationship between two variables. 
B) relates cross- sectional data only. 
C) is a graph of a theoretical relationship between two variables. 
D) relates time series data only. 
E) shows the dependence of one variable on another.

Question 8

The base year for an index number is

Accepted Answer

A) determined by the year the variable equals exactly 100. 
B) arbitrarily chosen for the specific purpose. 
C) declared by the federal government. 
D) dependant upon the type of data. 
E) the year in which 2 or more index numbers are equal to 100. 
A) determined by the year the variable equals exactly 100. 
B) arbitrarily chosen for the specific purpose. 
C) declared by the federal government. 
D) dependant upon the type of data. 
E) the year in which 2 or more index numbers are equal to 100.

Question 9

Which of the following best describes the relationship between positive and normative statements in economics?

Accepted Answer

A) Positive and normative statements are alternate ways of describing the desirability of certain economic policies. 
B) Normative statements evaluate the desirability of certain economic changes; positive statements do not. 
C) Economists generally agree with each other regardless of whether a question is positive or normative. 
D) Neither positive nor normative statements are concerned with the desirability of certain economic changes. 
E) Normative statements are those with which all economists agree; positive statements may give rise to some disagreement. 
A) Positive and normative statements are alternate ways of describing the desirability of certain economic policies. 
B) Normative statements evaluate the desirability of certain economic changes; positive statements do not. 
C) Economists generally agree with each other regardless of whether a question is positive or normative. 
D) Neither positive nor normative statements are concerned with the desirability of certain economic changes. 
E) Normative statements are those with which all economists agree; positive statements may give rise to some disagreement.

Question 10

An assertion about the desirability of reducing unemployment by lowering payroll taxes is most likely

Accepted Answer

A) a normative statement. 
B) a hypothesis. 
C) a testable proposition. 
D) a theory. 
E) a positive statement. 
A) a normative statement. 
B) a hypothesis. 
C) a testable proposition. 
D) a theory. 
E) a positive statement.

Question 11

An economist has data showing household income and energy consumption for 10 000 Canadian households. 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 bar chart diagram. 
D) a time- series line graph. 
E) a scatter diagram. 
A) a logarithmic scale diagram. 
B) a cross- sectional bar- chart graph. 
C) a time- series bar chart diagram. 
D) a time- series line graph. 
E) a scatter diagram.

Question 12

An economic theory

Accepted Answer

A) will be useful only if all human behaviour is rational. 
B) will be useful as long as it is logically consistent. 
C) is only useful if its underlying assumptions are realistic. 
D) will predict more accurately if it contains a greater number of mathematical equations. 
E) must be judged on its ability to explain and predict real- world phenomena. 
A) will be useful only if all human behaviour is rational. 
B) will be useful as long as it is logically consistent. 
C) is only useful if its underlying assumptions are realistic. 
D) will predict more accurately if it contains a greater number of mathematical equations. 
E) must be judged on its ability to explain and predict real- world phenomena.

Question 13

Suppose we observe that consumption of electricity decreases when the price of electricity rises. We can say that the two variables are related

Accepted Answer

A) negatively. 
B) linearly. 
C) non- linearly. 
D) positively. 
E) exogenously. 
A) negatively. 
B) linearly. 
C) non- linearly. 
D) positively. 
E) exogenously.

Question 14

The statement that a country's rate of economic growth is influenced by its firms' investment behaviour is an example of a(n)

Accepted Answer

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

Question 15

Suppose economists at the World Bank discover a positive correlation between family income and female education levels in developing countries. We can say that

Accepted Answer

A) there is a causal relationship between family income and female education. 
B) the correlation is inconsistent with a theory that an increase in female education levels causes an increase in family income. 
C) an increase in family income causes an increase in female education levels. 
D) the observed correlation is consistent with a theory that an increase in female education levels causes an increase in family income. 
E) an increase in female education levels causes an increase in family incomes. 
A) there is a causal relationship between family income and female education. 
B) the correlation is inconsistent with a theory that an increase in female education levels causes an increase in family income. 
C) an increase in family income causes an increase in female education levels. 
D) the observed correlation is consistent with a theory that an increase in female education levels causes an increase in family income. 
E) an increase in female education levels causes an increase in family incomes.

Question 16

When using statistics in economics, the possibility of error

Accepted Answer

A) is not considered to be important. 
B) can be eliminated with more sophisticated statistical techniques. 
C) cannot be evaluated. 
D) cannot be controlled. 
E) cannot be eliminated. 
A) is not considered to be important. 
B) can be eliminated with more sophisticated statistical techniques. 
C) cannot be evaluated. 
D) cannot be controlled. 
E) cannot be eliminated.

Question 17

Suppose that a particular theory predicts that on sunny days consumption of ice cream will rise and that on cloudy days consumption of ice cream will fall. If an economist tests this theory and finds that over a six- month period the theory predicts accurately, the economist would likely say

Accepted Answer

A) the evidence fails to reject the theory. 
B) the theory has been proven correct. 
C) the theory is always reliable. 
D) that the theory is not useful because consumption involves irrational human behaviour. 
E) the theory shouldn't be taken seriously. 
A) the evidence fails to reject the theory. 
B) the theory has been proven correct. 
C) the theory is always reliable. 
D) that the theory is not useful because consumption involves irrational human behaviour. 
E) the theory shouldn't be taken seriously.

Question 18

A positive statement is one that states

Accepted Answer

A) non- negative numbers. 
B) what is desirable. 
C) what is, was, or will be. 
D) what is and what should be. 
E) what should be but is not. 
A) non- negative numbers. 
B) what is desirable. 
C) what is, was, or will be. 
D) what is and what should be. 
E) what should be but is not.

Question 19

A normative statement

Accepted Answer

A) is one that involves a value judgment. 
B) has no place in the study and practice of economics. 
C) concerns what is provable. 
D) can be derived logically from facts. 
E) is a statement that is empirically testable. 
A) is one that involves a value judgment. 
B) has no place in the study and practice of economics. 
C) concerns what is provable. 
D) can be derived logically from facts. 
E) is a statement that is empirically testable.

Question 20

An economic theory requires, among other things,

Accepted Answer

A) a set of value judgments to interpret the empirical evidence. 
B) a controlled laboratory setting in which the theory can be tested. 
C) that the set of predictions be correct. 
D) a set of definitions of the variables to be considered. 
E) the use of endogenous variables only. 
A) a set of value judgments to interpret the empirical evidence. 
B) a controlled laboratory setting in which the theory can be tested. 
C) that the set of predictions be correct. 
D) a set of definitions of the variables to be considered. 
E) the use of endogenous variables only.

Suppose that two points on a straight line are (X = 4, Y = 5), and (X = 2, Y = 1). The slope of this line is

An unweighted index number

Which of the following is a positive statement?

Value judgments

Index numbers make it possible to compare

On a coordinate graph, what is the Y intercept of the function X = 60 + 3Y?

A scatter diagram

The base year for an index number is

Which of the following best describes the relationship between positive and normative statements in economics?

An assertion about the desirability of reducing unemployment by lowering payroll taxes is most likely

An economist has data showing household income and energy consumption for 10 000 Canadian households. The best way to illustrate these data is

An economic theory

Suppose we observe that consumption of electricity decreases when the price of electricity rises. We can say that the two variables are related

The statement that a country's rate of economic growth is influenced by its firms' investment behaviour is an example of a(n)

Suppose economists at the World Bank discover a positive correlation between family income and female education levels in developing countries. We can say that

When using statistics in economics, the possibility of error

Suppose that a particular theory predicts that on sunny days consumption of ice cream will rise and that on cloudy days consumption of ice cream will fall. If an economist tests this theory and finds that over a six- month period the theory predicts accurately, the economist would likely say

A positive statement is one that states

A normative statement

An economic theory requires, among other things,

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

Suppose that two points on a straight line are (X = 4, Y = 5), and (X = 2, Y = 1). The slope of this line is

An unweighted index number

Which of the following is a positive statement?

Value judgments

Index numbers make it possible to compare

On a coordinate graph, what is the Y intercept of the function X = 60 + 3Y?

A scatter diagram

The base year for an index number is

Which of the following best describes the relationship between positive and normative statements in economics?

An assertion about the desirability of reducing unemployment by lowering payroll taxes is most likely

An economist has data showing household income and energy consumption for 10 000 Canadian households. The best way to illustrate these data is

An economic theory

Suppose we observe that consumption of electricity decreases when the price of electricity rises. We can say that the two variables are related

The statement that a country's rate of economic growth is influenced by its firms' investment behaviour is an example of a(n)

Suppose economists at the World Bank discover a positive correlation between family income and female education levels in developing countries. We can say that

When using statistics in economics, the possibility of error

Suppose that a particular theory predicts that on sunny days consumption of ice cream will rise and that on cloudy days consumption of ice cream will fall. If an economist tests this theory and finds that over a six- month period the theory predicts accurately, the economist would likely say

A positive statement is one that states

A normative statement

An economic theory requires, among other things,

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