Question 1

Which one of the following is not considered a financial intermediary?

Accepted Answer

A) a bank 
B) a pension fund 
C) an insurance company 
D) a credit counsellor 
E) a credit union 
A) a bank 
B) a pension fund 
C) an insurance company 
D) a credit counsellor 
E) a credit union D

Question 2

Figure 6.4   Alt text for Figure 6.4: In figure 6.4, a graph comparing loanable funds and real interest rate.
Long description for Figure 6.4: The x-axis is labelled, loanable funds (billions of dollars per year), with points L1 and L2 marked.The y-axis is labelled, real interest rate, with points i1 and i2 marked.3 lines are shown; Supply S1, S2 and Demand.The Demand line begins at the top left corner and slopes down to the bottom centre.Line S1 begins near the origin and slopes up to the top right corner.Line S2 follows the same slope as S1, but is plotted to the left.The area between the lines S1 and S2 is indicated by a left pointing arrow.The Demand line intersects line S1 at the point (L1, i1), a little more than half-way along both the lines.The Demand line intersects line S2 at the point (L2, i2), a little more than half-way along both the lines.These points of intersection are connected to their respective coordinates on the x and y-axis with dotted lines.Between these dotted lines, an arrow points left from L1 toward L2, and another arrow points up from i1 toward i2.
-Refer to Figure 6.4.Which of the following is consistent with the graph depicted?

Accepted Answer

A) an increase in household income 
B) an increase in transfer payments to households 
C) an increase in the proportion of income after net taxes used for consumption 
D) an increase in tax revenues collected by the government 
E) an increase in the future profitability of firms operations 
A) an increase in household income 
B) an increase in transfer payments to households 
C) an increase in the proportion of income after net taxes used for consumption 
D) an increase in tax revenues collected by the government 
E) an increase in the future profitability of firms operations C

Question 3

What is the main difference between a consumption tax and an income tax?

Accepted Answer

A) A consumption tax requires households to pay taxes only on the income they have left after consumption, while an income tax requires households pay taxes on all earned income before consumption. 
B) A consumption tax requires households to pay taxes only on the income they spend, while an income tax requires households pay taxes on all earned income. 
C) A consumption tax always generates less revenue than an income tax. 
D) A consumption tax cannot be designed with exemptions, while an income tax can be. 
E) There is no difference between a consumption tax and an income tax. 
A) A consumption tax requires households to pay taxes only on the income they have left after consumption, while an income tax requires households pay taxes on all earned income before consumption. 
B) A consumption tax requires households to pay taxes only on the income they spend, while an income tax requires households pay taxes on all earned income. 
C) A consumption tax always generates less revenue than an income tax. 
D) A consumption tax cannot be designed with exemptions, while an income tax can be. 
E) There is no difference between a consumption tax and an income tax. B

Question 4

Explain and show graphically how government deficits can "crowd out" private investment.

Accepted Answer

When the government runs a deficit publi

Question 5

Potential GDP is the maximum output a firm is capable of producing.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following goods would see the largest decline in demand during a recession?

Accepted Answer

A) automobiles 
B) food 
C) clothing 
D) haircuts 
E) huggies diapers 
A) automobiles 
B) food 
C) clothing 
D) haircuts 
E) huggies diapers

Question 7

Table 6.1  
-Refer to Table 6.1.Using the table above, what is the approximate growth rate of real GDP from 2014 to 2015?

Accepted Answer

A) -1.5% 
B) 1% 
C) 2% 
D) 3% 
E) 4% 
A) -1.5% 
B) 1% 
C) 2% 
D) 3% 
E) 4%

Question 8

India has enjoyed substantial economic growth over the past decade. Which of the following best captures the concerns about the sustainability of this growth?

Accepted Answer

A) Without better human capital and infrastructure , the high growth rates cannot be sustained. 
B) As long as the labour force participation rate is rising, growth can still continue, despite a lack of technological progress. 
C) As long as the amount of capital per hour worked continues to expand, the growth rate in India will continue to rise at an increasing rate. 
D) Agricultural workers will continue to expand their productivity, thereby allowing India to achieve growth rates above those of higher-income countries. 
E) India will become overly reliant on local demand and should focus more on export led growth. 
A) Without better human capital and infrastructure , the high growth rates cannot be sustained. 
B) As long as the labour force participation rate is rising, growth can still continue, despite a lack of technological progress. 
C) As long as the amount of capital per hour worked continues to expand, the growth rate in India will continue to rise at an increasing rate. 
D) Agricultural workers will continue to expand their productivity, thereby allowing India to achieve growth rates above those of higher-income countries. 
E) India will become overly reliant on local demand and should focus more on export led growth.

Question 9

________ are financial securities that represent promises to repay a fixed amount of funds.

Accepted Answer

A) Stocks 
B) Bonds 
C) Interest rates 
D) Mutual funds 
E) Index tracking funds 
A) Stocks 
B) Bonds 
C) Interest rates 
D) Mutual funds 
E) Index tracking funds

Question 10

Which of the following is most likely to be able to sustain economic growth in an economy?

Accepted Answer

A) sustained increases in the labour force participation rate 
B) technological change 
C) increases in capital per hour worked 
D) accumulations of economic resources 
E) increases in the supply of labour 
A) sustained increases in the labour force participation rate 
B) technological change 
C) increases in capital per hour worked 
D) accumulations of economic resources 
E) increases in the supply of labour

Question 11

Table 6.2  
-Refer to Table 6.2.Using the table above, what is the approximate growth rate of real GDP from 2012 to 2013?

Accepted Answer

A) -4% 
B) -2% 
C) 2% 
D) 4% 
E) 6% 
A) -4% 
B) -2% 
C) 2% 
D) 4% 
E) 6%

Question 12

Which of the following will increase investment spending in the economy, holding everything else constant?

Accepted Answer

A) an increase in the federal government surplus 
B) an increase in the budget deficit 
C) an increase in consumer dissavings 
D) an increase in transfer payments 
E) an increase in interest rates 
A) an increase in the federal government surplus 
B) an increase in the budget deficit 
C) an increase in consumer dissavings 
D) an increase in transfer payments 
E) an increase in interest rates

Question 13

Carefully define the two categories of saving in the economy.

Accepted Answer

There are two categories of saving in th

Question 14

Which of the following statements describes the experiences of Bombardier since it was established in 1942?

Accepted Answer

A) strong uninterrupted growth in demand 
B) growth interrupted by periods of business cycle recession 
C) little or no growth in the long run, and unaffected by the business cycle 
D) little or no growth in the long run, but very vulnerable to the business cycle 
E) continually shrinking demand for its products 
A) strong uninterrupted growth in demand 
B) growth interrupted by periods of business cycle recession 
C) little or no growth in the long run, and unaffected by the business cycle 
D) little or no growth in the long run, but very vulnerable to the business cycle 
E) continually shrinking demand for its products

Question 15

The period of expansion ends with a ________ and the period of recession ends with a ________.

Accepted Answer

A) business cycle peak; business cycle trough 
B) business cycle trough; business cycle peak 
C) business cycle peak; business cycle peak 
D) business cycle trough; business cycle trough 
A) business cycle peak; business cycle trough 
B) business cycle trough; business cycle peak 
C) business cycle peak; business cycle peak 
D) business cycle trough; business cycle trough

Question 16

In a closed economy, which of the following components of GDP is not included?

Accepted Answer

A) investment 
B) government spending 
C) net exports 
D) consumption 
E) taxation 
A) investment 
B) government spending 
C) net exports 
D) consumption 
E) taxation

Question 17

The lengths of the recession and expansion phases and which sectors of the economy are most affected will rarely be the same in any two business cycles.

Accepted Answer

A) True 
 B)False

Question 18

If labour productivity growth slows down in a country, this means that the growth rate in ________ has declined.

Accepted Answer

A) labour force participation 
B) the quantity of goods or services that can be produced by one hour of work 
C) the working-age population 
D) nominal GDP 
E) real interest rates 
A) labour force participation 
B) the quantity of goods or services that can be produced by one hour of work 
C) the working-age population 
D) nominal GDP 
E) real interest rates

Question 19

What factors increase potential GDP? Include a definition of potential GDP in your answer.

Accepted Answer

Potential GDP is the level of GDP attain

Question 20

Which of the following goods would be most likely to see demand increase during a recession?

Accepted Answer

A) instant noodles 
B) steak 
C) cars 
D) houses 
E) smart phones 
A) instant noodles 
B) steak 
C) cars 
D) houses 
E) smart phones

Which one of the following is not considered a financial intermediary?

What is the main difference between a consumption tax and an income tax?

Explain and show graphically how government deficits can "crowd out" private investment.

Potential GDP is the maximum output a firm is capable of producing.

Which of the following goods would see the largest decline in demand during a recession?

Table 6.1 -Refer to Table 6.1.Using the table above, what is the approximate growth rate of real GDP from 2014 to 2015?

India has enjoyed substantial economic growth over the past decade. Which of the following best captures the concerns about the sustainability of this growth?

________ are financial securities that represent promises to repay a fixed amount of funds.

Which of the following is most likely to be able to sustain economic growth in an economy?

Table 6.2 -Refer to Table 6.2.Using the table above, what is the approximate growth rate of real GDP from 2012 to 2013?

Which of the following will increase investment spending in the economy, holding everything else constant?

Carefully define the two categories of saving in the economy.

Which of the following statements describes the experiences of Bombardier since it was established in 1942?

The period of expansion ends with a and the period of recession ends with a .

In a closed economy, which of the following components of GDP is not included?

The lengths of the recession and expansion phases and which sectors of the economy are most affected will rarely be the same in any two business cycles.

If labour productivity growth slows down in a country, this means that the growth rate in ________ has declined.

What factors increase potential GDP? Include a definition of potential GDP in your answer.

Which of the following goods would be most likely to see demand increase during a recession?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

GDP: Measuring Total Production and Income

Unemployment and Inflation

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 6: Economic Growth, The Financial System, and Business Cycles

Which one of the following is not considered a financial intermediary?

What is the main difference between a consumption tax and an income tax?

Explain and show graphically how government deficits can "crowd out" private investment.

Potential GDP is the maximum output a firm is capable of producing.

Which of the following goods would see the largest decline in demand during a recession?

Table 6.1 -Refer to Table 6.1.Using the table above, what is the approximate growth rate of real GDP from 2014 to 2015?

India has enjoyed substantial economic growth over the past decade. Which of the following best captures the concerns about the sustainability of this growth?

________ are financial securities that represent promises to repay a fixed amount of funds.

Which of the following is most likely to be able to sustain economic growth in an economy?

Table 6.2 -Refer to Table 6.2.Using the table above, what is the approximate growth rate of real GDP from 2012 to 2013?

Which of the following will increase investment spending in the economy, holding everything else constant?

Carefully define the two categories of saving in the economy.

Which of the following statements describes the experiences of Bombardier since it was established in 1942?

The period of expansion ends with a ________ and the period of recession ends with a ________.

In a closed economy, which of the following components of GDP is not included?

The lengths of the recession and expansion phases and which sectors of the economy are most affected will rarely be the same in any two business cycles.

If labour productivity growth slows down in a country, this means that the growth rate in ________ has declined.

What factors increase potential GDP? Include a definition of potential GDP in your answer.

Which of the following goods would be most likely to see demand increase during a recession?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

GDP: Measuring Total Production and Income

Unemployment and Inflation

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

The period of expansion ends with a and the period of recession ends with a .