Question 1

Which of the following best characterizes what an aggregate demand curve depicts?

Accepted Answer

A)  the quantity of goods and services demanded during a given time period at different interest rates, other things held constant 
B)  the final quantity of goods and services actually produced by the economy during a given time period, other things held constant 
C)  the quantity of goods and services demanded at different price levels during a given time period, other things held constant 
D)  the quantity of goods and services that the economy is capable of producing during a given time period, other things held constant 
A)  the quantity of goods and services demanded during a given time period at different interest rates, other things held constant 
B)  the final quantity of goods and services actually produced by the economy during a given time period, other things held constant 
C)  the quantity of goods and services demanded at different price levels during a given time period, other things held constant 
D)  the quantity of goods and services that the economy is capable of producing during a given time period, other things held constant C

Question 2

Which of the following describes a stock variable?

Accepted Answer

A)  You save $100 each week. 
B)  You buy $10 worth of gasoline each week. 
C)  You earn $500 per week at your job. 
D)  You own $5,000 worth of government bonds. 
A)  You save $100 each week. 
B)  You buy $10 worth of gasoline each week. 
C)  You earn $500 per week at your job. 
D)  You own $5,000 worth of government bonds. D

Question 3

Which of the following best characterizes the meaning of a recession?

Accepted Answer

A)  a period during which the percentage of the population employed is declining 
B)  a period during which employment, output, and income are declining 
C)  a period during which the price level is declining 
D)  a period during which more resources are being used 
A)  a period during which the percentage of the population employed is declining 
B)  a period during which employment, output, and income are declining 
C)  a period during which the price level is declining 
D)  a period during which more resources are being used B

Question 4

According to Keynes, the policy of incurring budget deficits will cause the equilibrium price level to rise.What is the corresponding effect on equilibrium output?

Accepted Answer

A)  It rises. 
B)  It falls. 
C)  It remains the same. 
D)  It first rises, and then falls. 
A)  It rises. 
B)  It falls. 
C)  It remains the same. 
D)  It first rises, and then falls.

Question 5

What will an increase in aggregate supply result in, all things equal?

Accepted Answer

A)  lower levels of employment 
B)  a rightward shift of the aggregate demand curve 
C)  a leftward shift of the aggregate demand curve 
D)  an economic expansion 
A)  lower levels of employment 
B)  a rightward shift of the aggregate demand curve 
C)  a leftward shift of the aggregate demand curve 
D)  an economic expansion

Question 6

What happened to unemployment, prices, and output during the Great Depression of the early 1930s?

Accepted Answer

A)  Unemployment and prices increased while output decreased. 
B)  Unemployment increased while output and prices decreased. 
C)  Unemployment and prices decreased while output increased. 
D)  Unemployment and output decreased while prices increased. 
A)  Unemployment and prices increased while output decreased. 
B)  Unemployment increased while output and prices decreased. 
C)  Unemployment and prices decreased while output increased. 
D)  Unemployment and output decreased while prices increased.

Question 7

What would an increase in government spending cause, other things constant?

Accepted Answer

A)  a leftward shift of the aggregate supply curve 
B)  a rightward shift of the aggregate supply curve 
C)  a leftward shift of the aggregate demand curve 
D)  a rightward shift of the aggregate demand curve 
A)  a leftward shift of the aggregate supply curve 
B)  a rightward shift of the aggregate supply curve 
C)  a leftward shift of the aggregate demand curve 
D)  a rightward shift of the aggregate demand curve

Question 8

Which of the following characterizes the nature of economic fluctuations?

Accepted Answer

A)  The number of businesses started changes. 
B)  The TSX average fluctuates relative to a long-term economic growth trend. 
C)  Consumption spending changes. 
D)  The level of economic activity fluctuates, relative to a long-term economic growth trend. 
A)  The number of businesses started changes. 
B)  The TSX average fluctuates relative to a long-term economic growth trend. 
C)  Consumption spending changes. 
D)  The level of economic activity fluctuates, relative to a long-term economic growth trend.

Question 9

According to Keynes, the policy of incurring budget surpluses will cause the equilibrium price level to fall.What is the corresponding effect on equilibrium output?

Accepted Answer

A)  It rises. 
B)  It falls. 
C)  It remains the same. 
D)  It first rises, and then falls. 
A)  It rises. 
B)  It falls. 
C)  It remains the same. 
D)  It first rises, and then falls.

Question 10

-Refer to the graphs in the exhibit.From the beginning of period 1 to the end of period 2, what happened to real GDP?

Accepted Answer

A)  Real GDP decreased, and then it increased. 
B)  Real GDP increased, and then it decreased. 
C)  Real GDP fell from $10,000 to $6,000. 
D)  Real GDP rose from $6,000 to $10,000. 
A)  Real GDP decreased, and then it increased. 
B)  Real GDP increased, and then it decreased. 
C)  Real GDP fell from $10,000 to $6,000. 
D)  Real GDP rose from $6,000 to $10,000.

Question 11

-Refer to the graphs in the exhibit.Which of the following might cause a shift in the aggregate demand curve from AD to AD' in period 1?

Accepted Answer

A)  an increase in household wealth 
B)  a fall in domestic interest rates 
C)  an increase in government spending 
D)  an appreciation of the dollar relative to other currencies 
A)  an increase in household wealth 
B)  a fall in domestic interest rates 
C)  an increase in government spending 
D)  an appreciation of the dollar relative to other currencies

Question 12

Which of the following is a stock variable?

Accepted Answer

A)  sales by corporations 
B)  borrowing by the federal government 
C)  household wealth 
D)  net exports 
A)  sales by corporations 
B)  borrowing by the federal government 
C)  household wealth 
D)  net exports

Question 13

Suppose the Canadian price level increased relative to price levels in foreign countries.How would domestic aggregate supply and aggregate demand curves be affected?

Accepted Answer

A)  The aggregate supply curve would shift outward, and the aggregate demand curve would remain unchanged. 
B)  The aggregate supply curve would shift inward, and the aggregate demand curve would remain unchanged. 
C)  The aggregate demand curve would shift outward, and the aggregate supply curve would remain unchanged. 
D)  The aggregate demand curve would shift inward, and the aggregate supply curve would remain unchanged. 
A)  The aggregate supply curve would shift outward, and the aggregate demand curve would remain unchanged. 
B)  The aggregate supply curve would shift inward, and the aggregate demand curve would remain unchanged. 
C)  The aggregate demand curve would shift outward, and the aggregate supply curve would remain unchanged. 
D)  The aggregate demand curve would shift inward, and the aggregate supply curve would remain unchanged.

Question 14

According to Keynesian economics, what does fine-tuning the economy mean?

Accepted Answer

A)  making government economic policy more "people oriented" 
B)  using government policies to adjust the economy and promote economic stability 
C)  tinkering with microeconomic problems, such as externalities and losing sight of the big picture 
D)  placing fewer regulations on the private sector, thereby eliminating the need for government intervention 
A)  making government economic policy more "people oriented" 
B)  using government policies to adjust the economy and promote economic stability 
C)  tinkering with microeconomic problems, such as externalities and losing sight of the big picture 
D)  placing fewer regulations on the private sector, thereby eliminating the need for government intervention

Question 15

The global financial panic in September 2008 led to a sharp fall in business investment spending and in consumer spending.How could these sharp falls be viewed?

Accepted Answer

A)  as a sharp decrease in aggregate supply 
B)  as a sharp decrease in aggregate demand 
C)  as a sharp decrease in aggregate supply and in aggregate demand 
D)  as a modest increase in aggregate supply 
A)  as a sharp decrease in aggregate supply 
B)  as a sharp decrease in aggregate demand 
C)  as a sharp decrease in aggregate supply and in aggregate demand 
D)  as a modest increase in aggregate supply

Question 16

While economic expansions average about 3.5 years in duration, what is the average duration of an economic contraction?

Accepted Answer

A)  about 1 year 
B)  about 2 years 
C)  about 3 years 
D)  about 4 years 
A)  about 1 year 
B)  about 2 years 
C)  about 3 years 
D)  about 4 years

Question 17

Suppose the economy was initially in equilibrium, and the aggregate demand curve shifted to the left.Which of the following would likely occur in this model?

Accepted Answer

A)  Employment would likely fall. 
B)  The price level would likely rise. 
C)  The aggregate supply curve would likely shift rightward. 
D)  The aggregate supply curve would likely shift leftward. 
A)  Employment would likely fall. 
B)  The price level would likely rise. 
C)  The aggregate supply curve would likely shift rightward. 
D)  The aggregate supply curve would likely shift leftward.

Question 18

What do economists mean by a "leading economic indicator"?

Accepted Answer

A)  an indicator of future economic activity 
B)  an indicator that measures current economic activity 
C)  a highly accurate indicator that is easily measured 
D)  an indicator that is accurate most of the time 
A)  an indicator of future economic activity 
B)  an indicator that measures current economic activity 
C)  a highly accurate indicator that is easily measured 
D)  an indicator that is accurate most of the time

Question 19

Suppose the Canadian price level decreases.What happens to the aggregate quantity of Canadian output demanded?

Accepted Answer

A)  It decreases because Canadian products become cheaper relative to foreign products. 
B)  It decreases because Canadian products become more expensive relative to foreign products. 
C)  It increases because Canadian products become cheaper relative to foreign products. 
D)  It increases because Canadian products become more expensive relative to foreign products. 
A)  It decreases because Canadian products become cheaper relative to foreign products. 
B)  It decreases because Canadian products become more expensive relative to foreign products. 
C)  It increases because Canadian products become cheaper relative to foreign products. 
D)  It increases because Canadian products become more expensive relative to foreign products.

Question 20

What is gross world product?

Accepted Answer

A)  the value of all final goods and services produced in the world during a given period 
B)  the value of all final goods produced in the world during a given period 
C)  the value of all final goods and services produced in Canada during a given period 
D)  the value of all final goods and services produced in all countries of the world except Canada during a given period 
A)  the value of all final goods and services produced in the world during a given period 
B)  the value of all final goods produced in the world during a given period 
C)  the value of all final goods and services produced in Canada during a given period 
D)  the value of all final goods and services produced in all countries of the world except Canada during a given period

Which of the following best characterizes what an aggregate demand curve depicts?

Which of the following describes a stock variable?

Which of the following best characterizes the meaning of a recession?

According to Keynes, the policy of incurring budget deficits will cause the equilibrium price level to rise.What is the corresponding effect on equilibrium output?

What will an increase in aggregate supply result in, all things equal?

What happened to unemployment, prices, and output during the Great Depression of the early 1930s?

What would an increase in government spending cause, other things constant?

Which of the following characterizes the nature of economic fluctuations?

According to Keynes, the policy of incurring budget surpluses will cause the equilibrium price level to fall.What is the corresponding effect on equilibrium output?

-Refer to the graphs in the exhibit.From the beginning of period 1 to the end of period 2, what happened to real GDP?

-Refer to the graphs in the exhibit.Which of the following might cause a shift in the aggregate demand curve from AD to AD' in period 1?

Which of the following is a stock variable?

Suppose the Canadian price level increased relative to price levels in foreign countries.How would domestic aggregate supply and aggregate demand curves be affected?

According to Keynesian economics, what does fine-tuning the economy mean?

The global financial panic in September 2008 led to a sharp fall in business investment spending and in consumer spending.How could these sharp falls be viewed?

While economic expansions average about 3.5 years in duration, what is the average duration of an economic contraction?

Suppose the economy was initially in equilibrium, and the aggregate demand curve shifted to the left.Which of the following would likely occur in this model?

What do economists mean by a "leading economic indicator"?

Suppose the Canadian price level decreases.What happens to the aggregate quantity of Canadian output demanded?

What is gross world product?

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, Supply, and Markets

Algebraic Approach to Demand, Supply, and Equilibrium

Tracking the Canadian Economy

Unemployment and Inflation

Productivity and Growth

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy in an Open Economy

Macro Policy Debate: Active or Passive

International Finance

International Trade

Economic Development

Understanding Graphs

Filters

Exam 6: Introduction to Macroeconomics

Which of the following best characterizes what an aggregate demand curve depicts?

Which of the following describes a stock variable?

Which of the following best characterizes the meaning of a recession?

According to Keynes, the policy of incurring budget deficits will cause the equilibrium price level to rise.What is the corresponding effect on equilibrium output?

What will an increase in aggregate supply result in, all things equal?

What happened to unemployment, prices, and output during the Great Depression of the early 1930s?

What would an increase in government spending cause, other things constant?

Which of the following characterizes the nature of economic fluctuations?

According to Keynes, the policy of incurring budget surpluses will cause the equilibrium price level to fall.What is the corresponding effect on equilibrium output?

-Refer to the graphs in the exhibit.From the beginning of period 1 to the end of period 2, what happened to real GDP?

-Refer to the graphs in the exhibit.Which of the following might cause a shift in the aggregate demand curve from AD to AD' in period 1?

Which of the following is a stock variable?

Suppose the Canadian price level increased relative to price levels in foreign countries.How would domestic aggregate supply and aggregate demand curves be affected?

According to Keynesian economics, what does fine-tuning the economy mean?

The global financial panic in September 2008 led to a sharp fall in business investment spending and in consumer spending.How could these sharp falls be viewed?

While economic expansions average about 3.5 years in duration, what is the average duration of an economic contraction?

Suppose the economy was initially in equilibrium, and the aggregate demand curve shifted to the left.Which of the following would likely occur in this model?

What do economists mean by a "leading economic indicator"?

Suppose the Canadian price level decreases.What happens to the aggregate quantity of Canadian output demanded?

What is gross world product?

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, Supply, and Markets

Algebraic Approach to Demand, Supply, and Equilibrium

Tracking the Canadian Economy

Unemployment and Inflation

Productivity and Growth

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy in an Open Economy

Macro Policy Debate: Active or Passive

International Finance

International Trade

Economic Development

Understanding Graphs

Filters