Question 1

Money is differentiated from other assets due to

Accepted Answer

A)  its value as a medium of exchange. 
B)  its value of facilitating government spending. 
C)  its value as a unit of account. 
D)  its invulnerability to inflation. 
E)  its value as smoothing out business cycles. 
A)  its value as a medium of exchange. 
B)  its value of facilitating government spending. 
C)  its value as a unit of account. 
D)  its invulnerability to inflation. 
E)  its value as smoothing out business cycles. A

Question 2

What is produced and consumed in the economy is determined jointly by

Accepted Answer

A)  standards of living and business cycles. 
B)  the economy's productive capacity and the preferences of consumers. 
C)  the behaviour of business managers and government policies. 
D)  government policies and the economy's productive capacity. 
E)  the preferences of consumers and the behaviour of business managers. 
A)  standards of living and business cycles. 
B)  the economy's productive capacity and the preferences of consumers. 
C)  the behaviour of business managers and government policies. 
D)  government policies and the economy's productive capacity. 
E)  the preferences of consumers and the behaviour of business managers. B

Question 3

The two key business cycle events in Canadian economic history were

Accepted Answer

A)  government budget deficits and World War II. 
B)  the Great Depression and government budget deficits. 
C)  World War II and the Great Depression. 
D)  the Great Depression and stagflation. 
E)  the productivity slowdown and the Great Depression. 
A)  government budget deficits and World War II. 
B)  the Great Depression and government budget deficits. 
C)  World War II and the Great Depression. 
D)  the Great Depression and stagflation. 
E)  the productivity slowdown and the Great Depression. C

Question 4

Business cycles in macroeconomics are

Accepted Answer

A)  the increase in a nation's productive capacity over a long period of time. 
B)  the economic interrelationships among nations. 
C)  changes in the average standard of living over time. 
D)  short-run ups and downs in aggregate economic activity. 
E)  profits and losses of firms. 
A)  the increase in a nation's productive capacity over a long period of time. 
B)  the economic interrelationships among nations. 
C)  changes in the average standard of living over time. 
D)  short-run ups and downs in aggregate economic activity. 
E)  profits and losses of firms.

Question 5

One important influence on the current account surplus is

Accepted Answer

A)  government spending. 
B)  taxes. 
C)  standards of living. 
D)  interest rates. 
E)  productive capacity. 
A)  government spending. 
B)  taxes. 
C)  standards of living. 
D)  interest rates. 
E)  productive capacity.

Question 6

In the long run,inflation is caused by

Accepted Answer

A)  global warning. 
B)  greedy monopolists. 
C)  the tradeoff between aggregate output and inflation. 
D)  aggressive labour unions. 
E)  growth in the money supply. 
A)  global warning. 
B)  greedy monopolists. 
C)  the tradeoff between aggregate output and inflation. 
D)  aggressive labour unions. 
E)  growth in the money supply.

Question 7

Long-run inflation tends to

Accepted Answer

A)  reduce employment, output, and consumption. 
B)  reduce consumption, but increase employment and output. 
C)  increase output and consumption, but reduce employment. 
D)  increase employment, but reduce output and consumption. 
E)  reduce output and employment, but increase consumption. 
A)  reduce employment, output, and consumption. 
B)  reduce consumption, but increase employment and output. 
C)  increase output and consumption, but reduce employment. 
D)  increase employment, but reduce output and consumption. 
E)  reduce output and employment, but increase consumption.

Question 8

In free-market economies

Accepted Answer

A)  tend to produce socially efficient outcomes. 
B)  generally perform worse than socially planned economies. 
C)  are hampered by social inefficiencies that are very common. 
D)  are technically but not socially efficient. 
E)  perform well, but suffer from many social inefficiencies. 
A)  tend to produce socially efficient outcomes. 
B)  generally perform worse than socially planned economies. 
C)  are hampered by social inefficiencies that are very common. 
D)  are technically but not socially efficient. 
E)  perform well, but suffer from many social inefficiencies.

Question 9

For the study of economic growth,it is most helpful to examine movements in ________; for the study of business cycles,it is most helpful to examine movements in ________.

Accepted Answer

A)  trend GDP; deviations from trend in GDP 
B)  deviations from trend in GDP; deviations from trend in GDP 
C)  trend GDP; trend GDP 
D)  trend income; deviation from trend in income 
E)  deviations from trend in GDP; trend GDP 
A)  trend GDP; deviations from trend in GDP 
B)  deviations from trend in GDP; deviations from trend in GDP 
C)  trend GDP; trend GDP 
D)  trend income; deviation from trend in income 
E)  deviations from trend in GDP; trend GDP

Question 10

Two plausible hypothesis to explain the productivity slowdown are

Accepted Answer

A)  globalization of capital markets and reductions in tariffs. 
B)  high interest rates and slower economic growth. 
C)  large government budget deficits and large balance of trade deficits. 
D)  adjustments to new technologies and failures in the educational system. 
E)  measurement problems and adjustments to new technologies. 
A)  globalization of capital markets and reductions in tariffs. 
B)  high interest rates and slower economic growth. 
C)  large government budget deficits and large balance of trade deficits. 
D)  adjustments to new technologies and failures in the educational system. 
E)  measurement problems and adjustments to new technologies.

Question 11

Growth in productivity slowed from the

Accepted Answer

A)  early 1950s to the late 1960s. 
B)  early 1960s to the early 1970s. 
C)  late 1960s to the early 1980s. 
D)  mid-1980s to the late 1990s. 
E)  early 1970s to the early 1980s. 
A)  early 1950s to the late 1960s. 
B)  early 1960s to the early 1970s. 
C)  late 1960s to the early 1980s. 
D)  mid-1980s to the late 1990s. 
E)  early 1970s to the early 1980s.

Question 12

The idea that government budget deficits do not matter under certain circumstances is

Accepted Answer

A)  called the Friedman-Lucas theory. 
B)  preposterous. 
C)  called the Ricardian equivalence theorem. 
D)  called the Milton Friedman theory. 
E)  attributed to Edward Prescott and Finn Kydland. 
A)  called the Friedman-Lucas theory. 
B)  preposterous. 
C)  called the Ricardian equivalence theorem. 
D)  called the Milton Friedman theory. 
E)  attributed to Edward Prescott and Finn Kydland.

Question 13

When there is high inflation

Accepted Answer

A)  interest rates fall due to government policy. 
B)  the real interest rate is always greater than the nominal interest rate. 
C)  the nominal interest rate is always greater than the real interest rate. 
D)  the real interest rate is always negative. 
E)  the nominal interest rate is approximately equal to the real interest rate. 
A)  interest rates fall due to government policy. 
B)  the real interest rate is always greater than the nominal interest rate. 
C)  the nominal interest rate is always greater than the real interest rate. 
D)  the real interest rate is always negative. 
E)  the nominal interest rate is approximately equal to the real interest rate.

Question 14

What do we assume about households and firms?

Accepted Answer

A)  Their interests are rarely aligned. 
B)  They look after each other. 
C)  They act irrationally. 
D)  They optimize. 
E)  They do what the government tells them to do. 
A)  Their interests are rarely aligned. 
B)  They look after each other. 
C)  They act irrationally. 
D)  They optimize. 
E)  They do what the government tells them to do.

Question 15

According to Keynesian coordination failure theory,the primary causes of business cycles are

Accepted Answer

A)  monetary factors. 
B)  technology shocks. 
C)  waves of self-fulfilling optimism and pessimism. 
D)  fiscal shocks. 
E)  shocks to aggregate demand. 
A)  monetary factors. 
B)  technology shocks. 
C)  waves of self-fulfilling optimism and pessimism. 
D)  fiscal shocks. 
E)  shocks to aggregate demand.

Question 16

To be useful,macroeconomic models

Accepted Answer

A)  must be complete, accurate descriptions of the world. 
B)  never generates testable hypothesis. 
C)  must be simple. 
D)  provides a lot of intricate details. 
E)  must be extremely realistic. 
A)  must be complete, accurate descriptions of the world. 
B)  never generates testable hypothesis. 
C)  must be simple. 
D)  provides a lot of intricate details. 
E)  must be extremely realistic.

Question 17

Countries gain from

Accepted Answer

A)  trading goods and assets with each other. 
B)  inflation. 
C)  long-run tradeoffs between aggregate output and inflation. 
D)  taxes. 
E)  productivity slowdown. 
A)  trading goods and assets with each other. 
B)  inflation. 
C)  long-run tradeoffs between aggregate output and inflation. 
D)  taxes. 
E)  productivity slowdown.

Question 18

Unemployment,at the aggregate level

Accepted Answer

A)  is zero in a perfect world. 
B)  is a sign of market failures. 
C)  is avoidable. 
D)  can be prevented with sound government policy. 
E)  is important for a well functioning economy. 
A)  is zero in a perfect world. 
B)  is a sign of market failures. 
C)  is avoidable. 
D)  can be prevented with sound government policy. 
E)  is important for a well functioning economy.

Question 19

Gross Domestic Product is

Accepted Answer

A)  the quantity of goods and services produced within a country's borders during some specified period of time. 
B)  the quantity of goods produced by Canadian residents domestically and abroad during some specific period of time. 
C)  the quantity of goods produced within a country's borders during some specific period of time. 
D)  the aggregate quantity of income earned by consumers who have jobs during some specified period of time. 
E)  the quantity of goods and services produced by Canadian residents domestically and abroad during some specific period of time. 
A)  the quantity of goods and services produced within a country's borders during some specified period of time. 
B)  the quantity of goods produced by Canadian residents domestically and abroad during some specific period of time. 
C)  the quantity of goods produced within a country's borders during some specific period of time. 
D)  the aggregate quantity of income earned by consumers who have jobs during some specified period of time. 
E)  the quantity of goods and services produced by Canadian residents domestically and abroad during some specific period of time.

Question 20

The structure of a macroeconomic model involves

Accepted Answer

A)  realistic features such as money. 
B)  the available technology. 
C)  the incomes of consumers. 
D)  the goods and services demanded by government. 
E)  the behaviour of government. 
A)  realistic features such as money. 
B)  the available technology. 
C)  the incomes of consumers. 
D)  the goods and services demanded by government. 
E)  the behaviour of government.

Money is differentiated from other assets due to

What is produced and consumed in the economy is determined jointly by

The two key business cycle events in Canadian economic history were

Business cycles in macroeconomics are

One important influence on the current account surplus is

In the long run,inflation is caused by

Long-run inflation tends to

In free-market economies

For the study of economic growth,it is most helpful to examine movements in ; for the study of business cycles,it is most helpful to examine movements in .

Two plausible hypothesis to explain the productivity slowdown are

Growth in productivity slowed from the

The idea that government budget deficits do not matter under certain circumstances is

When there is high inflation

What do we assume about households and firms?

According to Keynesian coordination failure theory,the primary causes of business cycles are

To be useful,macroeconomic models

Countries gain from

Unemployment,at the aggregate level

Gross Domestic Product is

The structure of a macroeconomic model involves

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters

Exam 1: Introduction

Money is differentiated from other assets due to

What is produced and consumed in the economy is determined jointly by

The two key business cycle events in Canadian economic history were

Business cycles in macroeconomics are

One important influence on the current account surplus is

In the long run,inflation is caused by

Long-run inflation tends to

In free-market economies

For the study of economic growth,it is most helpful to examine movements in ________; for the study of business cycles,it is most helpful to examine movements in ________.

Two plausible hypothesis to explain the productivity slowdown are

Growth in productivity slowed from the

The idea that government budget deficits do not matter under certain circumstances is

When there is high inflation

What do we assume about households and firms?

According to Keynesian coordination failure theory,the primary causes of business cycles are

To be useful,macroeconomic models

Countries gain from

Unemployment,at the aggregate level

Gross Domestic Product is

The structure of a macroeconomic model involves

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters

For the study of economic growth,it is most helpful to examine movements in ; for the study of business cycles,it is most helpful to examine movements in .