Question 1

Which of following statements is true?

Accepted Answer

A)  Except for few periods, Canadian government budget has always been in deficit. 
B)  Government budget is usually in deficit during expansion and in surplus during recession. 
C)  Canadian government budget realized large deficit during World Wars I and II, Great Depression, and between 1975 and 1996, and 2008. 
D)  A and C are both true. 
A)  Except for few periods, Canadian government budget has always been in deficit. 
B)  Government budget is usually in deficit during expansion and in surplus during recession. 
C)  Canadian government budget realized large deficit during World Wars I and II, Great Depression, and between 1975 and 1996, and 2008. 
D)  A and C are both true.

Question 2

The difference between microeconomics and macroeconomics is that

Accepted Answer

A)  microeconomics looks at supply and demand for goods, while macroeconomics looks at supply and demand for services. 
B)  microeconomics looks at prices, while macroeconomics looks at inflation. 
C)  microeconomics looks at individual consumers and firms, while macroeconomics looks at national totals. 
D)  microeconomics looks at national issues, while macroeconomics looks at global issues. 
A)  microeconomics looks at supply and demand for goods, while macroeconomics looks at supply and demand for services. 
B)  microeconomics looks at prices, while macroeconomics looks at inflation. 
C)  microeconomics looks at individual consumers and firms, while macroeconomics looks at national totals. 
D)  microeconomics looks at national issues, while macroeconomics looks at global issues.

Question 3

If the theory behind an economic model fits the data only moderately well, you would probably want to

Accepted Answer

A)  use the theory to predict what would happen if the economic setting or economic policies change. 
B)  start from scratch with a new model. 
C)  enrich the model with additional assumptions. 
D)  restate the research question. 
A)  use the theory to predict what would happen if the economic setting or economic policies change. 
B)  start from scratch with a new model. 
C)  enrich the model with additional assumptions. 
D)  restate the research question.

Question 4

Before World War II the average level of prices in Canada usually

Accepted Answer

A)  fell during wartime and rose during peacetime. 
B)  fell during wartime and fell during peacetime. 
C)  rose during wartime and fell during peacetime. 
D)  rose during wartime and rose during peacetime. 
A)  fell during wartime and rose during peacetime. 
B)  fell during wartime and fell during peacetime. 
C)  rose during wartime and fell during peacetime. 
D)  rose during wartime and rose during peacetime.

Question 5

Match each of the following jobs to its major area: forecasting, analysis, research, or data development. Explain your answers.
a. economist at university, testing theories about the efficient allocation of resources in the foreign exchange market
b. economist at Bay Street firm trying to predict the rate of inflation next year using past data
c. economist at auto firm looking at demand for new automobiles
d. economist at the Department of Finance trying to determine whether foreign firms are dumping goods in Canada
e. economist at Statistics Canada developing new methods for calculating price indexes
f. economist consulting in Eastern Europe about how to set up free-market financial systems

Accepted Answer

a. research
b. forec

Question 6

The highest and prolonged period of unemployment in Canada occurred during

Accepted Answer

A)  the Great Depression of the 1930s. 
B)  the 1981-1982 recession. 
C)  the 1990-1991 recession. 
D)  the 2001 recession in the US. 
A)  the Great Depression of the 1930s. 
B)  the 1981-1982 recession. 
C)  the 1990-1991 recession. 
D)  the 2001 recession in the US.

Question 7

Which of the following statements characterizes the trend in the Canadian aggregate price level?

Accepted Answer

A)  Despite fluctuations, CPI has risen significantly. 
B)  Canada has never experienced deflation. 
C)  Inflation has always been low, thanks to the Bank of Canada's policy. 
D)  The most recent deflation in Canada occurred in 2008. 
A)  Despite fluctuations, CPI has risen significantly. 
B)  Canada has never experienced deflation. 
C)  Inflation has always been low, thanks to the Bank of Canada's policy. 
D)  The most recent deflation in Canada occurred in 2008.

Question 8

Average labour productivity is

Accepted Answer

A)  the amount of workers per machine. 
B)  the amount of machines per worker. 
C)  the ratio of employed to unemployed workers. 
D)  the amount of output per worker. 
A)  the amount of workers per machine. 
B)  the amount of machines per worker. 
C)  the ratio of employed to unemployed workers. 
D)  the amount of output per worker.

Question 9

In analyzing macroeconomic data during the past year, you have discovered that average labour productivity fell, but total output increased. What was most likely to have caused this?

Accepted Answer

A)  Government deficit was reduced. 
B)  The capital/output ratio probably rose. 
C)  There was an increase in labour input. 
D)  Unemployment probably increased. 
A)  Government deficit was reduced. 
B)  The capital/output ratio probably rose. 
C)  There was an increase in labour input. 
D)  Unemployment probably increased.

Question 10

Which of the following statements applies to the average labour productivity in Canada?

Accepted Answer

A)  Average labour productivity has risen over time. 
B)  Average labour productivity growth has been strong during the World War II, 1950s and 1960s. 
C)  Average labour productivity growth has slowed down since 1970s, but increased in 1990s. 
D)  All of the above. 
A)  Average labour productivity has risen over time. 
B)  Average labour productivity growth has been strong during the World War II, 1950s and 1960s. 
C)  Average labour productivity growth has slowed down since 1970s, but increased in 1990s. 
D)  All of the above.

Question 11

A country is said to be experiencing deflation when

Accepted Answer

A)  prices of most goods and services are rising over time. 
B)  prices of most goods and services are falling over time. 
C)  total output is rising over time. 
D)  total output is falling over time. 
A)  prices of most goods and services are rising over time. 
B)  prices of most goods and services are falling over time. 
C)  total output is rising over time. 
D)  total output is falling over time.

Question 12

In 2005, the government of DANA spent $100 billion and collected $95 billion revenue. DANA's GDP in 2005 was $400 billion. The government of DANA had a budget ________ equal to ________ of GDP in 2005.

Accepted Answer

A)  deficit; 5 percent 
B)  surplus; 5 percent 
C)  deficit; 1.25 percent 
D)  surplus; 1.25 percent 
A)  deficit; 5 percent 
B)  surplus; 5 percent 
C)  deficit; 1.25 percent 
D)  surplus; 1.25 percent

Question 13

Which of the following is a topic of macroeconomics?

Accepted Answer

A)  why nations have different rates of growth 
B)  what causes inflation and what can be done about it 
C)  why unemployment periodically reaches very high levels 
D)  all of the above 
A)  why nations have different rates of growth 
B)  what causes inflation and what can be done about it 
C)  why unemployment periodically reaches very high levels 
D)  all of the above

Question 14

Macroeconomists disagree on normative analysis of economic issues because

Accepted Answer

A)  they use different tools to study economics. 
B)  they have different political agenda. 
C)  they have different values. 
D)  they have different objectives. 
A)  they use different tools to study economics. 
B)  they have different political agenda. 
C)  they have different values. 
D)  they have different objectives.

Question 15

The short-run, but sometimes sharp, contractions and expansions in economic activity are called

Accepted Answer

A)  recession. 
B)  stagnation. 
C)  inflation. 
D)  business cycles. 
A)  recession. 
B)  stagnation. 
C)  inflation. 
D)  business cycles.

Question 16

Macroeconomic information for the economy of Anchovy is given below:
 $$\begin{array} { | l r r } 
\hline & 2000 & 2001 \
\hline \text { Output (pizzas) } & 800 \mathrm { C } & 9000 \
\hline \text { Employment (workers) } & 70 \mathrm { C } & 800 \
\hline \text { Unemployed (workers) } & 70 & 100 \
\hline \text { Labour force (workers) } & 77 \mathrm { C } & 900 \
\hline \text { Price per pizza } & \$ 8.0 \mathrm { C } & \$ 9.00 \
\hline
\end{array}$$ a. What was the growth rate of average labour productivity in Anchovy between 2000 and 2001?
b. What was the inflation rate in Anchovy between 2000 and 2001?
c. What was the unemployment rate in 2000? In 2001?

Accepted Answer

a. Average labour productivity: 2000: 80

Question 17

A useful macroeconomic theory

Accepted Answer

A)  is based on reasonable and realistic assumptions. 
B)  is easy to use. 
C)  has implications that can be tested in the real world. 
D)  is consistent with the data and observed behaviour of the real-world economy. 
E)  all of the above. 
A)  is based on reasonable and realistic assumptions. 
B)  is easy to use. 
C)  has implications that can be tested in the real world. 
D)  is consistent with the data and observed behaviour of the real-world economy. 
E)  all of the above.

Question 18

The unemployment rate is the

Accepted Answer

A)  number of unemployed divided by the number of employed. 
B)  number of employed divided by the number of unemployed. 
C)  number of unemployed divided by the labour force. 
D)  labour force divided by the number of unemployed. 
A)  number of unemployed divided by the number of employed. 
B)  number of employed divided by the number of unemployed. 
C)  number of unemployed divided by the labour force. 
D)  labour force divided by the number of unemployed.

Question 19

The primary factor that caused some economists to lose their faith in the Keynesian approach to macroeconomic policy was

Accepted Answer

A)  the high levels of unemployment that occurred during the Great Depression. 
B)  the presence of both high unemployment and high inflation during the 1970s. 
C)  theoretical proof that Keynes's ideas were invalid. 
D)  evidence that Keynes's ideas were useful during economic recessions, but not during economic booms. 
A)  the high levels of unemployment that occurred during the Great Depression. 
B)  the presence of both high unemployment and high inflation during the 1970s. 
C)  theoretical proof that Keynes's ideas were invalid. 
D)  evidence that Keynes's ideas were useful during economic recessions, but not during economic booms.

Question 20

In 2001 Anchovy had imports of $50 billion, exports of $60 billion, and Anchovy's GDP was equal to $300 billion. The trade surplus was what percent of GDP in 2001?

Accepted Answer

A)  3.3% 
B)  10.0% 
C)  16.7% 
D)  20.0% 
A)  3.3% 
B)  10.0% 
C)  16.7% 
D)  20.0%

Which of following statements is true?

The difference between microeconomics and macroeconomics is that

If the theory behind an economic model fits the data only moderately well, you would probably want to

Before World War II the average level of prices in Canada usually

The highest and prolonged period of unemployment in Canada occurred during

Which of the following statements characterizes the trend in the Canadian aggregate price level?

Average labour productivity is

In analyzing macroeconomic data during the past year, you have discovered that average labour productivity fell, but total output increased. What was most likely to have caused this?

Which of the following statements applies to the average labour productivity in Canada?

A country is said to be experiencing deflation when

In 2005, the government of DANA spent $100 billion and collected $95 billion revenue. DANA's GDP in 2005 was $400 billion. The government of DANA had a budget equal to of GDP in 2005.

Which of the following is a topic of macroeconomics?

Macroeconomists disagree on normative analysis of economic issues because

The short-run, but sometimes sharp, contractions and expansions in economic activity are called

A useful macroeconomic theory

The unemployment rate is the

The primary factor that caused some economists to lose their faith in the Keynesian approach to macroeconomic policy was

In 2001 Anchovy had imports of $50 billion, exports of $60 billion, and Anchovy's GDP was equal to $300 billion. The trade surplus was what percent of GDP in 2001?

The Measurement and Structure of the Canadian Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

Business Cycles

The IS-LMAD-AS Model: A General Framework for Macroeconomic Analysis

Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy

Classical Business Cycle Analysis: Market-Clearing Macroeconomics

Keynesian Business Cycle Analysis: Non-Market-Clearing Macroeconomics

Unemployment and Inflation

Monetary Policy and the Bank of Canada

Government Spending and Its Financing

Filters

Exam 1: Introduction to Macroeconomics

Which of following statements is true?

The difference between microeconomics and macroeconomics is that

If the theory behind an economic model fits the data only moderately well, you would probably want to

Before World War II the average level of prices in Canada usually

The highest and prolonged period of unemployment in Canada occurred during

Which of the following statements characterizes the trend in the Canadian aggregate price level?

Average labour productivity is

In analyzing macroeconomic data during the past year, you have discovered that average labour productivity fell, but total output increased. What was most likely to have caused this?

Which of the following statements applies to the average labour productivity in Canada?

A country is said to be experiencing deflation when

In 2005, the government of DANA spent $100 billion and collected $95 billion revenue. DANA's GDP in 2005 was $400 billion. The government of DANA had a budget ________ equal to ________ of GDP in 2005.

Which of the following is a topic of macroeconomics?

Macroeconomists disagree on normative analysis of economic issues because

The short-run, but sometimes sharp, contractions and expansions in economic activity are called

A useful macroeconomic theory

The unemployment rate is the

The primary factor that caused some economists to lose their faith in the Keynesian approach to macroeconomic policy was

In 2001 Anchovy had imports of $50 billion, exports of $60 billion, and Anchovy's GDP was equal to $300 billion. The trade surplus was what percent of GDP in 2001?

The Measurement and Structure of the Canadian Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

Business Cycles

The IS-LMAD-AS Model: A General Framework for Macroeconomic Analysis

Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy

Classical Business Cycle Analysis: Market-Clearing Macroeconomics

Keynesian Business Cycle Analysis: Non-Market-Clearing Macroeconomics

Unemployment and Inflation

Monetary Policy and the Bank of Canada

Government Spending and Its Financing

Filters

In 2005, the government of DANA spent $100 billion and collected $95 billion revenue. DANA's GDP in 2005 was $400 billion. The government of DANA had a budget equal to of GDP in 2005.