Question 1

Since 1960,in Canada the price level has ________,while the rate of inflation has ________.

Accepted Answer

A) fluctuated widely; been relatively stable 
B) fluctuated widely; also fluctuated widely 
C) been rising steadily; been quite volatile 
D) been rising steadily; been relatively stable 
E) been quite volatile; been rising steadily 
A) fluctuated widely; been relatively stable 
B) fluctuated widely; also fluctuated widely 
C) been rising steadily; been quite volatile 
D) been rising steadily; been relatively stable 
E) been quite volatile; been rising steadily

Question 2

Consider an economy in which existing capital is being used at a high degree,shortages in labour and goods markets are developing,and costs are rising.Which of the following terms best describes this stage of the business cycle?

Accepted Answer

A) trough 
B) recovery 
C) peak 
D) recession 
E) slump 
A) trough 
B) recovery 
C) peak 
D) recession 
E) slump

Question 3

Real GDP measures

Accepted Answer

A) the constant-dollar value of the potential output of the nation's economy over the period of one year. 
B) the quantity of total output produced by the nation's economy over the period of one year. 
C) the fluctuations of national income around its long-term trend. 
D) the annual growth rate of real national income. 
E) the long-term trend in total output produced by the nation's economy. 
A) the constant-dollar value of the potential output of the nation's economy over the period of one year. 
B) the quantity of total output produced by the nation's economy over the period of one year. 
C) the fluctuations of national income around its long-term trend. 
D) the annual growth rate of real national income. 
E) the long-term trend in total output produced by the nation's economy.

Question 4

In general,productivity is a measure of

Accepted Answer

A) the economy's ability to increase real GDP per capita. 
B) the amount of output that the economy produces per unit of input. 
C) real GDP as a function of total employment. 
D) the total amount of output that the economy is capable of producing. 
E) potential output. 
A) the economy's ability to increase real GDP per capita. 
B) the amount of output that the economy produces per unit of input. 
C) real GDP as a function of total employment. 
D) the total amount of output that the economy is capable of producing. 
E) potential output.

Question 5

In macroeconomics,the term "national income" refers to

Accepted Answer

A) all sales of both current production and used goods. 
B) only those sales of currently produced goods sold to other nations. 
C) the value of a nation's total wealth. 
D) the value of the income generated by the production of total output. 
E) total current spending by all households. 
A) all sales of both current production and used goods. 
B) only those sales of currently produced goods sold to other nations. 
C) the value of a nation's total wealth. 
D) the value of the income generated by the production of total output. 
E) total current spending by all households.

Question 6

A change in the Consumer Price Index measures

Accepted Answer

A) a change in a specific absolute price. 
B) a change in quantities of commodities sold. 
C) a change in relative prices. 
D) a change in a broad average price over some particular time span. 
E) the change in gross domestic product. 
A) a change in a specific absolute price. 
B) a change in quantities of commodities sold. 
C) a change in relative prices. 
D) a change in a broad average price over some particular time span. 
E) the change in gross domestic product.

Question 7

In macroeconomics,if the value of the national product increases,there is

Accepted Answer

A) an even larger increase in the value of income claims on that output,due to value added. 
B) a decrease in value of income claims on that output,due to taxation. 
C) a decrease in the value of income claims on that output,due to importing. 
D) a decrease in the value of income claims on that output,due to household saving. 
E) an equal increase in the value of income claims on that output. 
A) an even larger increase in the value of income claims on that output,due to value added. 
B) a decrease in value of income claims on that output,due to taxation. 
C) a decrease in the value of income claims on that output,due to importing. 
D) a decrease in the value of income claims on that output,due to household saving. 
E) an equal increase in the value of income claims on that output.

Question 8

Suppose actual output is less than potential output.If the output gap measures the output loss due to the failure to achieve full employment,it can generally be concluded that the larger this output gap,the

Accepted Answer

A) greater is the employment rate. 
B) greater is the unemployment rate. 
C) lower is frictional unemployment. 
D) lower the deadweight loss of unemployment. 
E) more upward pressure there is on prices. 
A) greater is the employment rate. 
B) greater is the unemployment rate. 
C) lower is frictional unemployment. 
D) lower the deadweight loss of unemployment. 
E) more upward pressure there is on prices.

Question 9

Consider a small economy with real GDP of $1 billion and the number of workers employed equal to 2500.Which of the following is the best measure of labour productivity in this economy?

Accepted Answer

A) real GDP per hour worked = $200 
B) real GDP per employed worker = $200 000 
C) real GDP per hour worked = $400 
D) real GDP per employed worker = $400 000 
E) Not able to determine from the information provided 
A) real GDP per hour worked = $200 
B) real GDP per employed worker = $200 000 
C) real GDP per hour worked = $400 
D) real GDP per employed worker = $400 000 
E) Not able to determine from the information provided

Question 10

The real rate of interest is equal to the nominal interest rate

Accepted Answer

A) divided by the price level. 
B) minus the rate of inflation. 
C) multiplied by the rate of inflation. 
D) plus the risk ratio. 
E) plus the price level. 
A) divided by the price level. 
B) minus the rate of inflation. 
C) multiplied by the rate of inflation. 
D) plus the risk ratio. 
E) plus the price level.

Question 11

If a country's population is 15 million people,and 1 million of those are unemployed,the country's unemployment rate is

Accepted Answer

A) 2.5%. 
B) 3.3%. 
C) 6.7%. 
D) 7.1% 
E) There is not enough information to know. 
A) 2.5%. 
B) 3.3%. 
C) 6.7%. 
D) 7.1% 
E) There is not enough information to know.

Question 12

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms.
   TABLE 19-1
-Refer to Table 19-1.In the year 2014,it is probably the case that workers are ________ and factories are ________.

Accepted Answer

A) facing cyclical unemployment; facing temporary shut downs 
B) working longer than normal hours; facing temporary shutdowns 
C) experiencing zero unemployment; operating extra shifts 
D) experiencing zero unemployment; operating beyond their normal capacity 
E) working longer than normal hours; operating beyond their normal capacity 
A) facing cyclical unemployment; facing temporary shut downs 
B) working longer than normal hours; facing temporary shutdowns 
C) experiencing zero unemployment; operating extra shifts 
D) experiencing zero unemployment; operating beyond their normal capacity 
E) working longer than normal hours; operating beyond their normal capacity

Question 13

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms.
   TABLE 19-1
-Refer to Table 19-1.What is the unemployment rate when this economy is at "full employment"?

Accepted Answer

A) 5.9% 
B) 6.0% 
C) 6.3% 
D) 7.0% 
E) 7.1% 
A) 5.9% 
B) 6.0% 
C) 6.3% 
D) 7.0% 
E) 7.1%

Question 14

If the cyclical unemployment rate is greater than zero,then the

Accepted Answer

A) economy is operating beyond full employment. 
B) economy is operating at full employment. 
C) economy is operating at less than full employment. 
D) frictional unemployment rate is greater than the structural unemployment rate. 
E) real-wage unemployment rate is negative. 
A) economy is operating beyond full employment. 
B) economy is operating at full employment. 
C) economy is operating at less than full employment. 
D) frictional unemployment rate is greater than the structural unemployment rate. 
E) real-wage unemployment rate is negative.

Question 15

A worker currently earning $3000 per month has negotiated a 4% wage increase in anticipation of a 4% inflation rate in the next year.Under what scenario will the worker have a higher purchasing power?

Accepted Answer

A) if next year's inflation rate is 4% 
B) if next year's inflation rate is 3% 
C) if next year's inflation rate is 5% 
D) if next year some prices increase by only 4% 
E) if next year some prices increase by only 5% 
A) if next year's inflation rate is 4% 
B) if next year's inflation rate is 3% 
C) if next year's inflation rate is 5% 
D) if next year some prices increase by only 4% 
E) if next year some prices increase by only 5%

Question 16

An example of a topic outside the scope of macroeconomics is

Accepted Answer

A) changes in the price of a particular good in a specific market. 
B) changes in the unemployment rate. 
C) the aggregate growth rate of the economy. 
D) the overall level of unemployment. 
E) the level of productivity,as compared with that in the United States. 
A) changes in the price of a particular good in a specific market. 
B) changes in the unemployment rate. 
C) the aggregate growth rate of the economy. 
D) the overall level of unemployment. 
E) the level of productivity,as compared with that in the United States.

Question 17

Suppose that a price index for a certain basket of goods and services has a value of 150 in 2015 and a value of 156 in 2016.This index suggests that the cost of the market basket of goods and services

Accepted Answer

A) was 4% higher in 2016 than in 2015. 
B) was 6% lower in 2016 than in 2015. 
C) was 6% higher in 2016 than in 2015. 
D) was 156% higher in 2016 than in 2015. 
E) was approximately the same in 2016 and 2015. 
A) was 4% higher in 2016 than in 2015. 
B) was 6% lower in 2016 than in 2015. 
C) was 6% higher in 2016 than in 2015. 
D) was 156% higher in 2016 than in 2015. 
E) was approximately the same in 2016 and 2015.

Question 18

Workers with marketable skills sometimes quit a job and become unemployed,with the expectation of soon finding a better job.This type of unemployment is called

Accepted Answer

A) cyclical unemployment. 
B) frictional unemployment. 
C) historical unemployment. 
D) overly-optimistic unemployment. 
E) structural unemployment. 
A) cyclical unemployment. 
B) frictional unemployment. 
C) historical unemployment. 
D) overly-optimistic unemployment. 
E) structural unemployment.

Question 19

The three main reasons that Canada's real GDP has increased steadily for many years are

Accepted Answer

A) rising employment,increasing levels of education of the labour force and the increase in the participation rate of women in the labour force. 
B) an increasing stock of physical capital,increasing exports and rising employment. 
C) the increase in life expectancy,the rise in employment and increasing productivity. 
D) rising employment,increasing stock of physical capital and increasing productivity. 
E) increasing productivity of labour,increasing productivity of land and increasing productivity of the capital stock. 
A) rising employment,increasing levels of education of the labour force and the increase in the participation rate of women in the labour force. 
B) an increasing stock of physical capital,increasing exports and rising employment. 
C) the increase in life expectancy,the rise in employment and increasing productivity. 
D) rising employment,increasing stock of physical capital and increasing productivity. 
E) increasing productivity of labour,increasing productivity of land and increasing productivity of the capital stock.

Question 20

Workers with experience and skills sometimes lose their jobs and become unemployed due to changing technology or market conditions,even while firms in other industries or regions are looking to hire more workers.This type of unemployment is called

Accepted Answer

A) cyclical unemployment. 
B) frictional unemployment. 
C) historical unemployment. 
D) natural rate of unemployment. 
E) structural unemployment. 
A) cyclical unemployment. 
B) frictional unemployment. 
C) historical unemployment. 
D) natural rate of unemployment. 
E) structural unemployment.

Exam 19: What Macroeconomics Is All About

Since 1960,in Canada the price level has ________,while the rate of inflation has ________.

Consider an economy in which existing capital is being used at a high degree,shortages in labour and goods markets are developing,and costs are rising.Which of the following terms best describes this stage of the business cycle?

Real GDP measures

In general,productivity is a measure of

In macroeconomics,the term "national income" refers to

A change in the Consumer Price Index measures

In macroeconomics,if the value of the national product increases,there is

Suppose actual output is less than potential output.If the output gap measures the output loss due to the failure to achieve full employment,it can generally be concluded that the larger this output gap,the

Consider a small economy with real GDP of $1 billion and the number of workers employed equal to 2500.Which of the following is the best measure of labour productivity in this economy?

The real rate of interest is equal to the nominal interest rate

If a country's population is 15 million people,and 1 million of those are unemployed,the country's unemployment rate is

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms. TABLE 19-1 -Refer to Table 19-1.In the year 2014,it is probably the case that workers are ________ and factories are ________.

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms. TABLE 19-1 -Refer to Table 19-1.What is the unemployment rate when this economy is at "full employment"?

If the cyclical unemployment rate is greater than zero,then the

A worker currently earning $3000 per month has negotiated a 4% wage increase in anticipation of a 4% inflation rate in the next year.Under what scenario will the worker have a higher purchasing power?

An example of a topic outside the scope of macroeconomics is

Suppose that a price index for a certain basket of goods and services has a value of 150 in 2015 and a value of 156 in 2016.This index suggests that the cost of the market basket of goods and services

Workers with marketable skills sometimes quit a job and become unemployed,with the expectation of soon finding a better job.This type of unemployment is called

The three main reasons that Canada's real GDP has increased steadily for many years are

Workers with experience and skills sometimes lose their jobs and become unemployed due to changing technology or market conditions,even while firms in other industries or regions are looking to hire more workers.This type of unemployment is called

Economic Issues and Concepts

Economic Theories,Data,and Graphs

Demand, Supply, and Price

Elasticity

Price Controls and Market Efficiency

Consumer Behaviour

Producers in the Short Run

Producers in the Long Run

Competitive Markets

Monopoly, cartels, and Price Discrimination

Imperfect Competition and Strategic Behaviour

Economic Efficiency and Public Policy

How Factor Markets Work

Labour Markets and Income Inequality

Interest Rates and the Capital Market

Market Failures and Government Intervention

The Economics of Environmental Protection

Taxation and Public Expenditure

The Measurement of National Income

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Output and Prices in the Short Run

From the Short Run to the Long Run: The Adjustment of Factor Prices

Long-Run Economic Growth

Money and Banking

Money, Interest Rates, and Economic Activity

Monetary Policy in Canada

Inflation and Disinflation

Unemployment Fluctuations and the Nairu

Government Debt and Deficits

The Gains From International Trade

Trade Policy

Exchange Rates and the Balance of Payments

Filters

Since 1960,in Canada the price level has ,while the rate of inflation has .

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms. TABLE 19-1 -Refer to Table 19-1.In the year 2014,it is probably the case that workers are and factories are .