Question 1

In a simple graphical model of the supply and demand for pizza with the price of pizza measured vertically and the quantity of pizza measured horizontally:

Accepted Answer

A)  the supply curve slopes upward and to the right. 
B)  the demand curve slopes upward and to the right. 
C)  the supply curve slopes downward and to the right. 
D)  at the equilibrium price,the supply of pizza exceeds the demand for pizza. 
A)  the supply curve slopes upward and to the right. 
B)  the demand curve slopes upward and to the right. 
C)  the supply curve slopes downward and to the right. 
D)  at the equilibrium price,the supply of pizza exceeds the demand for pizza.

Question 2

Which of the following is the best example of a sticky price?

Accepted Answer

A)  the price of a barrel of oil 
B)  the price of the Canadian dollar in terms of euros 
C)  the price of a share of stock 
D)  the price of a soft drink in a vending machine 
A)  the price of a barrel of oil 
B)  the price of the Canadian dollar in terms of euros 
C)  the price of a share of stock 
D)  the price of a soft drink in a vending machine

Question 3

Macroeconomics is:

Accepted Answer

A)  based on microeconomic foundations. 
B)  completely separate from microeconomics. 
C)  explicitly based on microeconomic behaviour. 
D)  a subsidiary branch of microeconomics. 
A)  based on microeconomic foundations. 
B)  completely separate from microeconomics. 
C)  explicitly based on microeconomic behaviour. 
D)  a subsidiary branch of microeconomics.

Question 4

Exogenous variables are:

Accepted Answer

A)  determined outside the model. 
B)  determined within the model. 
C)  the outputs of the model. 
D)  explained by the model. 
A)  determined outside the model. 
B)  determined within the model. 
C)  the outputs of the model. 
D)  explained by the model.

Question 5

Assume that the equation for demand for bread at a small bakery is Qd = 60 - 10Pb + 3Y,where Qd is the quantity of bread demanded in loaves and Y is the average income in the town in thousands of dollars.
a.If the average income in the town is 10,state the equation for Qd in terms of Pb.
b.Draw a graph of the demand curve with Qd on the horizontal axis and Pb on the vertical axis.Label the curve DD.

Accepted Answer

Question 6

Recessions are periods when real GDP:

Accepted Answer

A)  increases slowly. 
B)  increases rapidly. 
C)  decreases mildly. 
D)  decreases severely. 
A)  increases slowly. 
B)  increases rapidly. 
C)  decreases mildly. 
D)  decreases severely.

Question 7

Compared with a recession,real GDP during a depression:

Accepted Answer

A)  increases more rapidly. 
B)  increases at approximately the same rate. 
C)  decreases at approximately the same rate. 
D)  decreases more severely. 
A)  increases more rapidly. 
B)  increases at approximately the same rate. 
C)  decreases at approximately the same rate. 
D)  decreases more severely.

Question 8

Assume that the equation for demand for bread at a small bakery is Qd = 60 - 10Pb + 3Y,where Qd is the quantity of bread demanded in loaves,Pb is the price of bread in dollars per loaf,and Y is the average income in the town in thousands of dollars.Assume also that the equation for supply of bread is Qs = 30 + 20Pb - 30 Pf,where Qs is the quantity supplied and Pf is the price of flour in dollars per pound.Assume finally that markets clear,so that Qd = Qs.a.If Y is 10 and Pf is $1,solve mathematically for equilibrium Q and Pb.b.If the average income in the town increases to 15,solve for the new equilibrium Q and Pb.

Accepted Answer

a. 	Q = 60 loaves, P

Question 9

Macroeconomic models:

Accepted Answer

A)  assume all wages and prices are sticky. 
B)  assume all wages and prices are flexible. 
C)  make different assumptions to explain different aspects of the macroeconomy. 
D)  focus primarily on the optimizing behaviour of households and firms. 
A)  assume all wages and prices are sticky. 
B)  assume all wages and prices are flexible. 
C)  make different assumptions to explain different aspects of the macroeconomy. 
D)  focus primarily on the optimizing behaviour of households and firms.

Question 10

A graph of the unemployment rate for Canada over the twentieth century shows:

Accepted Answer

A)  a consistent upward trend in the unemployment rate. 
B)  an overall downward trend in the unemployment rate interrupted by a large upturn in the 1930s. 
C)  rates of unemployment always greater than zero,with substantial variations from year to year. 
D)  alternating periods of positive and negative rates of unemployment. 
A)  a consistent upward trend in the unemployment rate. 
B)  an overall downward trend in the unemployment rate interrupted by a large upturn in the 1930s. 
C)  rates of unemployment always greater than zero,with substantial variations from year to year. 
D)  alternating periods of positive and negative rates of unemployment.

Question 11

Macroeconomists are like scientists because they both:

Accepted Answer

A)  design data and conduct controlled experiments to test their theories. 
B)  rely on data analyzed from experiments they set up in a laboratory. 
C)  are unlimited in their use of controlled experiments. 
D)  collect data,develop hypotheses,and analyze the results. 
A)  design data and conduct controlled experiments to test their theories. 
B)  rely on data analyzed from experiments they set up in a laboratory. 
C)  are unlimited in their use of controlled experiments. 
D)  collect data,develop hypotheses,and analyze the results.

Question 12

A period of falling prices is called:

Accepted Answer

A)  deflation. 
B)  inflation. 
C)  a depression. 
D)  a recession. 
A)  deflation. 
B)  inflation. 
C)  a depression. 
D)  a recession.

Question 13

The inflation rate in Canada averaged about:

Accepted Answer

A)  zero between 1920 and 1945. 
B)  zero between 1945 and 2005. 
C)  10 percent between 1920 and 1945. 
D)  10 percent between 1945 and 2005. 
A)  zero between 1920 and 1945. 
B)  zero between 1945 and 2005. 
C)  10 percent between 1920 and 1945. 
D)  10 percent between 1945 and 2005.

Question 14

Which of the following statements about economic models is true?

Accepted Answer

A)  There is only one correct economic model. 
B)  All economic models are based on the same assumptions. 
C)  The purpose of economic models is to show how endogenous variables affect exogenous variables. 
D)  Economists use different models to address different questions. 
A)  There is only one correct economic model. 
B)  All economic models are based on the same assumptions. 
C)  The purpose of economic models is to show how endogenous variables affect exogenous variables. 
D)  Economists use different models to address different questions.

In a simple graphical model of the supply and demand for pizza with the price of pizza measured vertically and the quantity of pizza measured horizontally:

Which of the following is the best example of a sticky price?

Macroeconomics is:

Exogenous variables are:

Recessions are periods when real GDP:

Compared with a recession,real GDP during a depression:

Macroeconomic models:

A graph of the unemployment rate for Canada over the twentieth century shows:

Macroeconomists are like scientists because they both:

A period of falling prices is called:

The inflation rate in Canada averaged about:

Which of the following statements about economic models is true?

The Data of Macroeconomics

The Open Economy

Unemployment

Economic Growth I

Economic Growth II

Introduction to Economic Fluctuations

Aggregate Demand I

Aggregate Supply and the Short-Run

Stabilization Policy

Government Debt and Budget Deficits

Investment

Money Supply and Money Demand

The Financial System

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Exam 1: The Science of Macroeconomics

In a simple graphical model of the supply and demand for pizza with the price of pizza measured vertically and the quantity of pizza measured horizontally:

Which of the following is the best example of a sticky price?

Macroeconomics is:

Exogenous variables are:

Recessions are periods when real GDP:

Compared with a recession,real GDP during a depression:

Macroeconomic models:

A graph of the unemployment rate for Canada over the twentieth century shows:

Macroeconomists are like scientists because they both:

A period of falling prices is called:

The inflation rate in Canada averaged about:

Which of the following statements about economic models is true?

The Data of Macroeconomics

The Open Economy

Unemployment

Economic Growth I

Economic Growth II

Introduction to Economic Fluctuations

Aggregate Demand I

Aggregate Supply and the Short-Run

Stabilization Policy

Government Debt and Budget Deficits

Investment

Money Supply and Money Demand

The Financial System

Filters