Question 1

Modern economic growth in a country implies that output per person increases.

Accepted Answer

A) True 
 B)False  True

Question 2

Commodities such as airline tickets, and gasoline have sticky prices.

Accepted Answer

A) True 
 B)False  False

Question 3

In response to an unexpected change in demand, if the prices are free to adjust quickly:

Accepted Answer

A) a firm could always operate at its optimal output level. 
B) a firm would experience a decline in its output and employment. 
C) a firm would not be able to adjust its output according to the plan. 
D) a firm would not be able to change its employment accordingly. 
A) a firm could always operate at its optimal output level. 
B) a firm would experience a decline in its output and employment. 
C) a firm would not be able to adjust its output according to the plan. 
D) a firm would not be able to change its employment accordingly. A

Question 4

To facilitate the international comparisons of living standards around the world, adjustments are supposed to be made to each country's GDP.These adjustments require:

Accepted Answer

A) calculating each country's GDP in terms of U.S.dollar, dividing it by the general price level and, subtracting the previous year's value of the country's GDP from it. 
B) converting each country's GDP to U.S.dollars, dividing it by the country's population and, to adjust the resulting figure for the purchasing power parity. 
C) each country's GDP should be multiplied by its general price level. 
D) there is no need for any adjustments since, each country's GDP is the representative of its standard of living. 
A) calculating each country's GDP in terms of U.S.dollar, dividing it by the general price level and, subtracting the previous year's value of the country's GDP from it. 
B) converting each country's GDP to U.S.dollars, dividing it by the country's population and, to adjust the resulting figure for the purchasing power parity. 
C) each country's GDP should be multiplied by its general price level. 
D) there is no need for any adjustments since, each country's GDP is the representative of its standard of living.

Question 5

The official unemployment rate:

Accepted Answer

A) reveals people over 21 years of age who are currently discouraged and are not looking for a job. 
B) is the percentage of the labour force which is unemployed. 
C) is the percentage of the labour force which is working part-time. 
D) is the percentage of the total population which is not working. 
A) reveals people over 21 years of age who are currently discouraged and are not looking for a job. 
B) is the percentage of the labour force which is unemployed. 
C) is the percentage of the labour force which is working part-time. 
D) is the percentage of the total population which is not working.

Question 6

Unemployment occurs when a person cannot get a job despite being willing to work and actively seeking work.

Accepted Answer

A) True 
 B)False

Question 7

Demand shocks are the expected changes in the demand for goods and services.

Accepted Answer

A) True 
 B)False

Question 8

In reality, all the prices in the economy are inflexible and are not able to change rapidly when demand changes unexpectedly.

Accepted Answer

A) True 
 B)False

Question 9

Real GDP and nominal GDP differ because real GDP:

Accepted Answer

A) is adjusted for changes in the nation's distribution of income. 
B) includes the economic effects of international trade. 
C) is equal to the nominal GDP minus the total tax payments. 
D) has been adjusted for changes in the price level. 
A) is adjusted for changes in the nation's distribution of income. 
B) includes the economic effects of international trade. 
C) is equal to the nominal GDP minus the total tax payments. 
D) has been adjusted for changes in the price level.

Question 10

To explain the short-run fluctuations in the real-world economies, economists refer to:

Accepted Answer

A) the combination of unexpected changes in demand and inflexible prices. 
B) the combination of unexpected changes in demand and flexible prices. 
C) the combination of fully expected changes in demand and inflexible prices. 
D) the combination of flexible prices and changes in the inventories. 
A) the combination of unexpected changes in demand and inflexible prices. 
B) the combination of unexpected changes in demand and flexible prices. 
C) the combination of fully expected changes in demand and inflexible prices. 
D) the combination of flexible prices and changes in the inventories.

Question 11

The short-run fluctuations in output and unemployment that we see in the real world are the result of:

Accepted Answer

A) shocks and events that are going according to the plans. 
B) shocks and events that are not going according to the plans. 
C) the actual demand to be exactly what the firms were expecting. 
D) the actual supply to be exactly what the firms were planning. 
A) shocks and events that are going according to the plans. 
B) shocks and events that are not going according to the plans. 
C) the actual demand to be exactly what the firms were expecting. 
D) the actual supply to be exactly what the firms were planning.

Question 12

________ shocks are unexpected changes in the demand for goods and services While, _________ shocks are unexpected changes in the supply of goods and services.

Accepted Answer

A) Supply; demand. 
B) Investment; savings. 
C) Internal; external. 
D) Demand; supply. 
A) Supply; demand. 
B) Investment; savings. 
C) Internal; external. 
D) Demand; supply.

Question 13

During the Great Recession, Canada lost:

Accepted Answer

A) 250,000 jobs. 
B) 300,000 jobs. 
C) 400,000 jobs. 
D) 550,000 jobs. 
A) 250,000 jobs. 
B) 300,000 jobs. 
C) 400,000 jobs. 
D) 550,000 jobs.

Question 14

Assume that the demand for goods and services falls across the entire economy and for an extended period of time.If the prices are inflexible, the unintended increase in business inventories would force:

Accepted Answer

A) businesses to keep the production at the existing level. 
B) businesses to increase the level of production. 
C) businesses to lower the level of production. 
D) businesses to increase the level of employment. 
A) businesses to keep the production at the existing level. 
B) businesses to increase the level of production. 
C) businesses to lower the level of production. 
D) businesses to increase the level of employment.

Question 15

What is it called when a firm is forced to cope with a situation different than the one they were expecting?

Accepted Answer

A) Risk 
B) Uncertainty 
C) Shock 
D) Upheaval 
A) Risk 
B) Uncertainty 
C) Shock 
D) Upheaval

Question 16

Inflation means:

Accepted Answer

A) an increase in individuals' real income. 
B) that all prices are rising and at the same rate. 
C) an increase in the overall price level. 
D) a decrease in the overall level of prices. 
A) an increase in individuals' real income. 
B) that all prices are rising and at the same rate. 
C) an increase in the overall price level. 
D) a decrease in the overall level of prices.

Question 17

In economics, the term "investment" includes:

Accepted Answer

A) the purchase of a Microsoft stock. 
B) the purchase of gold by a businessman. 
C) the addition of cash to a savings account. 
D) any increase in business inventories. 
A) the purchase of a Microsoft stock. 
B) the purchase of gold by a businessman. 
C) the addition of cash to a savings account. 
D) any increase in business inventories.

Question 18

The inequality of saving and planned investment:

Accepted Answer

A) is attributable to a low level of consumption. 
B) may be of considerable significance because of the subsequent changes in income, employment, and the price level. 
C) is of no consequence because a compensating inequality of tax collections and government spending will always occur. 
D) is of no consequence because saving and actual investment will always be equal. 
A) is attributable to a low level of consumption. 
B) may be of considerable significance because of the subsequent changes in income, employment, and the price level. 
C) is of no consequence because a compensating inequality of tax collections and government spending will always occur. 
D) is of no consequence because saving and actual investment will always be equal.

Question 19

Modern economic growth refers to:

Accepted Answer

A) an increase in the general price level. 
B) an increase in output per person. 
C) an increase in the output. 
D) an increase in percentage of the population which participates in the labour force. 
A) an increase in the general price level. 
B) an increase in output per person. 
C) an increase in the output. 
D) an increase in percentage of the population which participates in the labour force.

Question 20

The term "inflation" describes the situation where:

Accepted Answer

A) general price levels are declining. 
B) stock market prices are increasing. 
C) all prices are increasing at the same rate. 
D) the overall price level is increasing. 
A) general price levels are declining. 
B) stock market prices are increasing. 
C) all prices are increasing at the same rate. 
D) the overall price level is increasing.

Exam 6: Part B: An Introduction to Macroeconomics

Modern economic growth in a country implies that output per person increases.

Commodities such as airline tickets, and gasoline have sticky prices.

In response to an unexpected change in demand, if the prices are free to adjust quickly:

To facilitate the international comparisons of living standards around the world, adjustments are supposed to be made to each country's GDP.These adjustments require:

The official unemployment rate:

Unemployment occurs when a person cannot get a job despite being willing to work and actively seeking work.

Demand shocks are the expected changes in the demand for goods and services.

In reality, all the prices in the economy are inflexible and are not able to change rapidly when demand changes unexpectedly.

Real GDP and nominal GDP differ because real GDP:

To explain the short-run fluctuations in the real-world economies, economists refer to:

The short-run fluctuations in output and unemployment that we see in the real world are the result of:

________ shocks are unexpected changes in the demand for goods and services While, _________ shocks are unexpected changes in the supply of goods and services.

During the Great Recession, Canada lost:

Assume that the demand for goods and services falls across the entire economy and for an extended period of time.If the prices are inflexible, the unintended increase in business inventories would force:

What is it called when a firm is forced to cope with a situation different than the one they were expecting?

Inflation means:

In economics, the term "investment" includes:

The inequality of saving and planned investment:

Modern economic growth refers to:

The term "inflation" describes the situation where:

Part A: Limits, Alternatives, and Choices

Part B: Limits, Alternatives, and Choices

Part A: The Market System and the Circular Flow

Part B: The Market System and the Circular Flow

Part A: Demand, Supply, and Market Equilibrium

Part B: Demand, Supply, and Market Equilibrium

Part A: Market Failures: Public Goods and Externalities

Part B: Market Failures: Public Goods and Externalities

Part A: Governments Role and Government Failure

Part B: Governments Role and Government Failure

Part A: An Introduction to Macroeconomics

Part A: Measuring the Economys Output

Part B: Measuring the Economys Output

Part A: Economic Growth

Part B: Economic Growth

Part A: Business Cycles, Unemployment, and Inflation

Part B: Business Cycles, Unemployment, and Inflation

Part A: Basic Macroeconomic Relationships

Part B: Basic Macroeconomic Relationships

Part A: The Aggregate Expenditures Model

Part B: The Aggregate Expenditures Model

Part A: Aggregate Demand and Aggregate Supply

Part B: Aggregate Demand and Aggregate Supply

Part A: Fiscal Policy, Deficits, Surpluses, and Debt

Part B: Fiscal Policy, Deficits, Surpluses, and Debt

Part A: Money, Banking, and Money Creation

Part B: Money, Banking, and Money Creation

Part A: Interest Rates and Monetary Policy

Part B: Interest Rates and Monetary Policy

Part A: Long-Run Macroeconomic Adjustments

Part B: Long-Run Macroeconomic Adjustments

Part A: International Trade

Part B: International Trade

Part C: Financial Economics

Part A: The Balance of Payments and Exchange Rates

Part B: The Balance of Payments and Exchange Rates

The Economics of Developing Countries

Filters

shocks are unexpected changes in the demand for goods and services While, _ shocks are unexpected changes in the supply of goods and services.