Question 1

Which of the following is a normative statement?

Accepted Answer

A) Reducing unemployment is more important than reducing inflation. 
B) Queen Elizabeth II is the wealthiest woman in the world. 
C) The sun rises in the west and sets in the east. 
D) A government deficit will reduce unemployment and cause an increase in prices. 
E) An increase in the price of lumber is followed by a decrease in the construction of new houses. 
A) Reducing unemployment is more important than reducing inflation. 
B) Queen Elizabeth II is the wealthiest woman in the world. 
C) The sun rises in the west and sets in the east. 
D) A government deficit will reduce unemployment and cause an increase in prices. 
E) An increase in the price of lumber is followed by a decrease in the construction of new houses.

Question 2

Suppose that a particular theory predicts that on Monday, Wednesday, and Friday the stock market will rise and that on Tuesday and Thursday the stock market 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 that the theory

Accepted Answer

A) has been proven correct. 
B) is not rejected by the evidence. 
C) is not useful because stock markets involve irrational human behaviour. 
D) is reliable. 
E) shouldn't be taken seriously. 
A) has been proven correct. 
B) is not rejected by the evidence. 
C) is not useful because stock markets involve irrational human behaviour. 
D) is reliable. 
E) shouldn't be taken seriously.

Question 3

A scientific prediction is

Accepted Answer

A) a conditional statement of the following form: if A occurs, then B will follow. 
B) a prophesy of how the future will unfold. 
C) a causal statement of the following form: A will occur because B occurred. 
D) always based on the law of large numbers. 
E) not testable. 
A) a conditional statement of the following form: if A occurs, then B will follow. 
B) a prophesy of how the future will unfold. 
C) a causal statement of the following form: A will occur because B occurred. 
D) always based on the law of large numbers. 
E) not testable.

Question 4

When it is said that variable A depends on variable B, then A is

Accepted Answer

A) a function of B. 
B) independent of B. 
C) proportional to B. 
D) a derivative of B. 
E) partially exclusive of B. 
A) a function of B. 
B) independent of B. 
C) proportional to B. 
D) a derivative of B. 
E) partially exclusive of B.

Question 5

An economist collects data comparing per- capita expenditures on health care across provinces and territories for the year 2009. The best way to illustrate this data is

Accepted Answer

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

Question 6

The statement that a two- percent increase in the money supply leads to a two- percent increase in the price level is an example of a(n)

Accepted Answer

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

Question 7

Each of the following is an example of a hypothesis EXCEPT:

Accepted Answer

A) If the price of a movie ticket increases, then John will attend fewer movies. 
B) If the movie is starring Harrison Ford, then Charles and John will both attend. 
C) Charles does not enjoy movies. 
D) If Charles attends the movie, then John will not attend. 
E) If the theatre catches on fire, then people will leave the theatre. 
A) If the price of a movie ticket increases, then John will attend fewer movies. 
B) If the movie is starring Harrison Ford, then Charles and John will both attend. 
C) Charles does not enjoy movies. 
D) If Charles attends the movie, then John will not attend. 
E) If the theatre catches on fire, then people will leave the theatre.

Question 8

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

Accepted Answer

A) - 60 
B) 0 
C) 60 
D) - 20 
E) 20 
A) - 60 
B) 0 
C) 60 
D) - 20 
E) 20

Question 9

A valid theory

Accepted Answer

A) extrapolates from the past behaviour of a variable to predict its future course. 
B) generates a hypothesis that can predict future events. 
C) appeals to the law of large numbers. 
D) allows one to prove irrefutably one's hypothesis. 
E) allows one to deduce a normative statement. 
A) extrapolates from the past behaviour of a variable to predict its future course. 
B) generates a hypothesis that can predict future events. 
C) appeals to the law of large numbers. 
D) allows one to prove irrefutably one's hypothesis. 
E) allows one to deduce a normative statement.

Question 10

What is the best way to display the unemployment rate in each of the world's developed economies in 2009?

Accepted Answer

A) a scatter diagram with two variables 
B) a cross- sectional graph with time- series data 
C) a cross- sectional bar chart graph 
D) a scatter diagram 
E) a time series line graph 
A) a scatter diagram with two variables 
B) a cross- sectional graph with time- series data 
C) a cross- sectional bar chart graph 
D) a scatter diagram 
E) a time series line graph

Question 11

If the graph of a function is a horizontal line, the slope of this line is

Accepted Answer

A) infinity. 
B) undefined. 
C) - 1. 
D) 0. 
E) 1. 
A) infinity. 
B) undefined. 
C) - 1. 
D) 0. 
E) 1.

Question 12

The statement "Y is a function of X" means that the

Accepted Answer

A) values of Y and X are independent. 
B) values of Y and X are the same. 
C) values of Y and X are related to some third variable. 
D) value of Y depends on that of X. 
E) value of X depends on that of Y. 
A) values of Y and X are independent. 
B) values of Y and X are the same. 
C) values of Y and X are related to some third variable. 
D) value of Y depends on that of X. 
E) value of X depends on that of Y.

Which of the following is a normative statement?

A scientific prediction is

When it is said that variable A depends on variable B, then A is

An economist collects data comparing per- capita expenditures on health care across provinces and territories for the year 2009. The best way to illustrate this data is

The statement that a two- percent increase in the money supply leads to a two- percent increase in the price level is an example of a(n)

Each of the following is an example of a hypothesis EXCEPT:

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

A valid theory

What is the best way to display the unemployment rate in each of the world's developed economies in 2009?

If the graph of a function is a horizontal line, the slope of this line is

The statement "Y is a function of X" means that the

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

Which of the following is a normative statement?

A scientific prediction is

When it is said that variable A depends on variable B, then A is

An economist collects data comparing per- capita expenditures on health care across provinces and territories for the year 2009. The best way to illustrate this data is

The statement that a two- percent increase in the money supply leads to a two- percent increase in the price level is an example of a(n)

Each of the following is an example of a hypothesis EXCEPT:

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

A valid theory

What is the best way to display the unemployment rate in each of the world's developed economies in 2009?

If the graph of a function is a horizontal line, the slope of this line is

The statement "Y is a function of X" means that the

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