Question 1

Suppose the Canadian price level increases.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 2

What does stagflation refer to?

Accepted Answer

A)  a combination of rising unemployment and rising trade deficits 
B)  a combination of high unemployment and rising prices 
C)  high, rapidly increasing inflation 
D)  a combination of rising trade deficits and rising federal government budget deficits 
A)  a combination of rising unemployment and rising trade deficits 
B)  a combination of high unemployment and rising prices 
C)  high, rapidly increasing inflation 
D)  a combination of rising trade deficits and rising federal government budget deficits

Question 3

On an aggregate demand and aggregate supply graph, how can the Great Depression be pictured?

Accepted Answer

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

Question 4

In reference to the aggregate supply curve, what would an increase in the price level cause?

Accepted Answer

A)  an increase in the quantity of aggregate output supplied 
B)  a decrease in the quantity of aggregate output supplied 
C)  a leftward shift of the aggregate supply curve 
D)  a rightward shift of the aggregate supply curve 
A)  an increase in the quantity of aggregate output supplied 
B)  a decrease in the quantity of aggregate output supplied 
C)  a leftward shift of the aggregate supply curve 
D)  a rightward shift of the aggregate supply curve

Question 5

What do economists mean when they refer to the economy's price level?

Accepted Answer

A)  the rate of inflation 
B)  the price of goods and services relative to consumers' incomes 
C)  a general measure of prices of all goods and services 
D)  a period of level, or steady, prices 
A)  the rate of inflation 
B)  the price of goods and services relative to consumers' incomes 
C)  a general measure of prices of all goods and services 
D)  a period of level, or steady, prices

Question 6

Which of the following can partially explain long-term growth in production?

Accepted Answer

A)  trade surpluses that lead to accumulations of precious metals 
B)  a gradual but consistent increase in the price level 
C)  general optimism about the future and the pioneering spirit of Canada 
D)  improvements in technology 
A)  trade surpluses that lead to accumulations of precious metals 
B)  a gradual but consistent increase in the price level 
C)  general optimism about the future and the pioneering spirit of Canada 
D)  improvements in technology

Question 7

In the 1960s, what did government policy makers believe that they could do?

Accepted Answer

A)  stabilize the economy by letting the market system solve all problems 
B)  reduce unemployment by running federal budget surpluses 
C)  eliminate government's role in stabilization policy 
D)  use taxation and government spending to fine-tune the economy 
A)  stabilize the economy by letting the market system solve all problems 
B)  reduce unemployment by running federal budget surpluses 
C)  eliminate government's role in stabilization policy 
D)  use taxation and government spending to fine-tune the economy

Question 8

Which statement characterizes a short-run aggregate supply curve?

Accepted Answer

A)  The short-run aggregate supply curve portrays an inverse relationship between the price level and quantity of aggregate output. 
B)  Resource utilization is constant along the short-run aggregate supply curve. 
C)  A movement along a short-run aggregate supply curve that is reflected in a decrease in the price level encourages firms to expand production. 
D)  A movement along a short-run aggregate supply curve that is reflected in an increase in the price level encourages firms to expand production. 
A)  The short-run aggregate supply curve portrays an inverse relationship between the price level and quantity of aggregate output. 
B)  Resource utilization is constant along the short-run aggregate supply curve. 
C)  A movement along a short-run aggregate supply curve that is reflected in a decrease in the price level encourages firms to expand production. 
D)  A movement along a short-run aggregate supply curve that is reflected in an increase in the price level encourages firms to expand production.

Question 9

-Refer to the graphs in the exhibit.In period 4, the price level starts at 2.When the aggregate supply curve shifts from AS' to AS'' what happens to the price level?

Accepted Answer

A)  It changes to 1. 
B)  It changes to 2. 
C)  It changes to 3. 
D)  It changes to 4. 
A)  It changes to 1. 
B)  It changes to 2. 
C)  It changes to 3. 
D)  It changes to 4.

Question 10

As the price level increases, the amount of goods and services that consumers, businesses, and governments desire to purchase will change.How will this be reflected in the aggregate demand curve?

Accepted Answer

A)  as a leftward movement of the aggregate demand curve 
B)  as a rightward movement of the aggregate demand curve 
C)  as a movement upward along the aggregate demand curve 
D)  as a movement downward along the aggregate demand curve 
A)  as a leftward movement of the aggregate demand curve 
B)  as a rightward movement of the aggregate demand curve 
C)  as a movement upward along the aggregate demand curve 
D)  as a movement downward along the aggregate demand curve

Question 11

Which of the following can partially explain long-term growth in production?

Accepted Answer

A)  increases in government spending 
B)  increases in availability of resources 
C)  reductions in federal taxes 
D)  a gradual but consistent increase in the price level 
A)  increases in government spending 
B)  increases in availability of resources 
C)  reductions in federal taxes 
D)  a gradual but consistent increase in the price level

Question 12

-Refer to the exhibit.Which line represents aggregate demand?

Accepted Answer

A)  line a 
B)  line b 
C)  line c 
D)  line d 
A)  line a 
B)  line b 
C)  line c 
D)  line d

Question 13

Which statement best describes how economic fluctuations in one country are related to fluctuations in other countries?

Accepted Answer

A)  Economic fluctuations are linked, but NOT perfectly synchronized, across countries. 
B)  Economic fluctuations are perfectly synchronized across countries. 
C)  Economic fluctuations in one country are independent of fluctuations in other countries. 
D)  Economic fluctuations in Canada always lag behind fluctuations in other developed economies. 
A)  Economic fluctuations are linked, but NOT perfectly synchronized, across countries. 
B)  Economic fluctuations are perfectly synchronized across countries. 
C)  Economic fluctuations in one country are independent of fluctuations in other countries. 
D)  Economic fluctuations in Canada always lag behind fluctuations in other developed economies.

Question 14

Suppose the economy is initially in equilibrium, and then an energy shock occurs, such as when OPEC raised oil prices in the 1970s.In terms of inflation and unemployment, which of the following is likely to result?

Accepted Answer

A)  Prices and unemployment will likely rise. 
B)  Prices and unemployment will likely fall. 
C)  Prices will rise and unemployment will likely fall. 
D)  Prices will fall and unemployment will likely rise. 
A)  Prices and unemployment will likely rise. 
B)  Prices and unemployment will likely fall. 
C)  Prices will rise and unemployment will likely fall. 
D)  Prices will fall and unemployment will likely rise.

Question 15

Why does the aggregate demand curve slope downward?

Accepted Answer

A)  because when the price level increases, consumers feel poorer and therefore buy less 
B)  because when the price level increases, consumers feel richer and therefore buy more 
C)  because when domestic prices increase, consumers substitute domestic goods for imported ones 
D)  because when the price of a particular good increases, consumers substitute away from that good 
A)  because when the price level increases, consumers feel poorer and therefore buy less 
B)  because when the price level increases, consumers feel richer and therefore buy more 
C)  because when domestic prices increase, consumers substitute domestic goods for imported ones 
D)  because when the price of a particular good increases, consumers substitute away from that good

Question 16

Why does the aggregate demand curve slope downward?

Accepted Answer

A)  because, at a higher price level, fewer goods and services are available 
B)  because the periods when the price level is rising are usually times of swift declines in economic activity 
C)  because households feel poorer when average prices increase 
D)  because if the Canadian price level rises, foreigners will buy more Canadian goods, leaving fewer Canadian goods for domestic consumers 
A)  because, at a higher price level, fewer goods and services are available 
B)  because the periods when the price level is rising are usually times of swift declines in economic activity 
C)  because households feel poorer when average prices increase 
D)  because if the Canadian price level rises, foreigners will buy more Canadian goods, leaving fewer Canadian goods for domestic consumers

Question 17

Which statement best characterizes what happens to the aggregate demand curve when the price level rises?

Accepted Answer

A)  A rise in the price level moves the economy rightward along the aggregate demand curve. 
B)  A rise in the price level moves the economy leftward along the aggregate demand curve. 
C)  A rise in the price level shifts the aggregate demand curve to the left. 
D)  A rise in the price level shifts the aggregate demand curve to the right. 
A)  A rise in the price level moves the economy rightward along the aggregate demand curve. 
B)  A rise in the price level moves the economy leftward along the aggregate demand curve. 
C)  A rise in the price level shifts the aggregate demand curve to the left. 
D)  A rise in the price level shifts the aggregate demand curve to the right.

Question 18

In combating stagflation, how may an increase in government spending affect inflation and unemployment?

Accepted Answer

A)  It may increase aggregate demand, which may help reduce inflation but aggravate unemployment. 
B)  It may increase aggregate demand, which may increase unemployment and inflation. 
C)  It may increase aggregate demand, which may help reduce unemployment but aggravate inflation. 
D)  It may increase aggregate demand, which may help reduce unemployment and inflation. 
A)  It may increase aggregate demand, which may help reduce inflation but aggravate unemployment. 
B)  It may increase aggregate demand, which may increase unemployment and inflation. 
C)  It may increase aggregate demand, which may help reduce unemployment but aggravate inflation. 
D)  It may increase aggregate demand, which may help reduce unemployment and inflation.

Question 19

Which of the following occurs simultaneously with a higher price level and leads to stagflation?

Accepted Answer

A)  lower employment 
B)  higher aggregate output 
C)  federal budget deficits 
D)  federal budget surpluses 
A)  lower employment 
B)  higher aggregate output 
C)  federal budget deficits 
D)  federal budget surpluses

Question 20

Which of the following can partially explain long-term growth in production?

Accepted Answer

A)  improvements in the "rules of the game" that facilitate production and exchange 
B)  the peaks and troughs of the business cycle (or economic fluctuations) 
C)  trade surpluses that lead to accumulations of precious metals 
D)  federal government budget deficits 
A)  improvements in the "rules of the game" that facilitate production and exchange 
B)  the peaks and troughs of the business cycle (or economic fluctuations) 
C)  trade surpluses that lead to accumulations of precious metals 
D)  federal government budget deficits

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

What does stagflation refer to?

On an aggregate demand and aggregate supply graph, how can the Great Depression be pictured?

In reference to the aggregate supply curve, what would an increase in the price level cause?

What do economists mean when they refer to the economy's price level?

Which of the following can partially explain long-term growth in production?

In the 1960s, what did government policy makers believe that they could do?

Which statement characterizes a short-run aggregate supply curve?

-Refer to the graphs in the exhibit.In period 4, the price level starts at 2.When the aggregate supply curve shifts from AS' to AS'' what happens to the price level?

As the price level increases, the amount of goods and services that consumers, businesses, and governments desire to purchase will change.How will this be reflected in the aggregate demand curve?

Which of the following can partially explain long-term growth in production?

-Refer to the exhibit.Which line represents aggregate demand?

Which statement best describes how economic fluctuations in one country are related to fluctuations in other countries?

Suppose the economy is initially in equilibrium, and then an energy shock occurs, such as when OPEC raised oil prices in the 1970s.In terms of inflation and unemployment, which of the following is likely to result?

Why does the aggregate demand curve slope downward?

Why does the aggregate demand curve slope downward?

Which statement best characterizes what happens to the aggregate demand curve when the price level rises?

In combating stagflation, how may an increase in government spending affect inflation and unemployment?

Which of the following occurs simultaneously with a higher price level and leads to stagflation?

Which of the following can partially explain long-term growth in production?

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

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

What does stagflation refer to?

On an aggregate demand and aggregate supply graph, how can the Great Depression be pictured?

In reference to the aggregate supply curve, what would an increase in the price level cause?

What do economists mean when they refer to the economy's price level?

Which of the following can partially explain long-term growth in production?

In the 1960s, what did government policy makers believe that they could do?

Which statement characterizes a short-run aggregate supply curve?

-Refer to the graphs in the exhibit.In period 4, the price level starts at 2.When the aggregate supply curve shifts from AS' to AS'' what happens to the price level?

As the price level increases, the amount of goods and services that consumers, businesses, and governments desire to purchase will change.How will this be reflected in the aggregate demand curve?

Which of the following can partially explain long-term growth in production?

-Refer to the exhibit.Which line represents aggregate demand?

Which statement best describes how economic fluctuations in one country are related to fluctuations in other countries?

Suppose the economy is initially in equilibrium, and then an energy shock occurs, such as when OPEC raised oil prices in the 1970s.In terms of inflation and unemployment, which of the following is likely to result?

Why does the aggregate demand curve slope downward?

Why does the aggregate demand curve slope downward?

Which statement best characterizes what happens to the aggregate demand curve when the price level rises?

In combating stagflation, how may an increase in government spending affect inflation and unemployment?

Which of the following occurs simultaneously with a higher price level and leads to stagflation?

Which of the following can partially explain long-term growth in production?

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