Deck 5: Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Question 1

Macroeconomics looks at

A) the global economy.
B) the combined outcomes of all individual choices.
C) the Canadian economy.
D) money and the financial system.
E) all of the above answers.

Answer 1

all of the above answers.

Question 2

Macroeconomics looks at

A) the performance of the Canadian economy.
B) individual choices.
C) choices made by business people.
D) shopping.
E) why you might work more hours after a pay raise.

Answer 2

the performance of the Canadian economy.

Question 3

Say's Law states which of the following?

A) What goes up must come down.
B) In the long run, we are all dead.
C) Supply creates its own demand.
D) What is true for one is not true for all.
E) The meek shall inherit the earth.

Answer 3

Supply creates its own demand.

Question 4

Macroeconomics looks at

A) the global economy.
B) individual choices.
C) choices made by business people.
D) shopping.
E) why you might work more hours after a pay raise.

Question 5

In the circular flow of economic life, which players are the main buyers in input markets?

A) economists
B) households
C) governments
D) banks
E) businesses

Question 6

According to the paradox of thrift, when everyone saves more,

A) businesses raise prices.
B) banks raise interest rates.
C) government spend more.
D) businesses lay off workers.
E) households spend more.

Question 7

Macroeconomics looks at

A) the performance of the Canadian economy.
B) individual choices.
C) choices made by business people.
D) shopping.
E) why you might work more hours after a pay raise.

Question 8

Which statement is false?

A) Consumer spending is business income.
B) Business spending is consumer income.
C) If consumers and businesses both increase spending, everyone's incomes falls.
D) If consumers and businesses both increase spending, employment increases.
E) Falling wages decrease demand in output markets.

Question 9

In the circular flow of economic life, which players are the main sellers in output markets?

A) economists
B) households
C) governments
D) banks
E) businesses

Question 10

The Great Depression of 1929 was worse than the Great Recession of 2009 because in 1929 there were no

A) stock market crashes.
B) government programs to help the unemployed.
C) bank failures.
D) government blunders.
E) falling prices.

Question 11

Input markets determine

A) all prices.
B) loans.
C) outputs.
D) incomes.
E) connections.

Question 12

Which statement is false?

A) Consumer spending is business income.
B) Business spending is consumer income.
C) If consumers and businesses both cut spending, everyone's incomes falls.
D) If consumers and businesses both cut spending, employment increases.
E) Falling wages decrease demand in output markets.

Question 13

When everybody saves their money, aggregate savings decrease. This is an example of

A) the Zero Sum Scenario.
B) the Fallacy of Combination.
C) the Kobayashi Maru Scenario.
D) Say's Law.
E) the Paradox of Thrift.

Question 14

In the circular flow of economic life, which players are the main sellers in input markets?

A) economists
B) households
C) governments
D) banks
E) businesses

Question 15

The economist most associated with the "No - Markets Fail Often" view is

A) Joseph Stiglitz.
B) John Maynard Keynes.
C) George Costanza.
D) Jean-Baptiste Say.
E) James Tiberius Kirk.

Question 16

In the circular flow of economic life, which players are the main buyers in output markets?

A) economists
B) households
C) governments
D) banks
E) businesses

Question 17

According to the "Yes - Markets Self-Adjust" view,

A) macroeconomic outcomes are different from microeconomic outcomes.
B) Say's Law is sometimes true but usually not.
C) there are broken connections between input markets and output markets.
D) supply creates its own demand.
E) all of the above are true.

Question 18

The economist most associated with the "Yes - Markets Self-Adjust" view is

A) J.B. Say.
B) J.K. Rowling.
C) J.M. Keynes.
D) G.B. Shaw.
E) A.C. Pigou.

Question 19

Speculative bubbles that helped trigger the Great Depression and the Global Financial Crisis involve

A) money.
B) banks.
C) expectations.
D) all of the above.
E) none of the above.

Question 20

The fallacy of composition suggests

A) all for one and one for all.
B) the needs of the many outweigh the needs of the few.
C) what is true for one is not true for all.
D) what goes around, comes around.
E) be true to your school.

Question 21

According to the "No - Markets Fail Often" view,

A) macroeconomic outcomes differ from microeconomic outcomes.
B) Say's Law is sometimes true but usually not.
C) there are broken connections between input markets and output markets.
D) a short run focus is more important than the long run.
E) all of the above are true.

Question 22

Macroeconomics focuses on the individual smart choices of consumers and businesses.

Question 23

Incomes are determined in input markets.

Question 24

Macroeconomics analyzes the performance of the whole Canadian economy and the global economy.

Question 25

The economist most associated with the view that markets are quick to adjust is J.B. Say.

Question 26

According to the fallacy of composition, "What is true for one is true for all."

Question 27

Businesses are buyers in input markets.

Question 28

All prices are determined in output markets.

Question 29

Households are buyers in input markets.

Question 30

The economist most associated with the view that markets are quick to adjust is J.M. Keynes.

Question 31

Macroeconomics focuses on the combined market outcomes of all individual choices.

Question 32

Say's Law states, "What is true for one is true for all."

Question 33

The economist most associated with the view that markets are not quick to adjust is J.M. Keynes.

Question 34

According to the fallacy of composition, "What is true for one is not true for all."

Question 35

Output prices are determined in output markets.

Question 36

Say's Law states, "What is true for one is not true for all."

Question 37

Businesses are sellers in input markets.

Question 38

The economist most associated with the view that markets are not quick to adjust is J.B. Say.

Question 39

Microeconomics analyzes the performance of the whole Canadian economy and the global economy.

Question 40

Incomes are determined in output markets.

Question 41

The paradox of thrift happens when many people save more and spend less, so employment and savings actually decrease.

Question 42

The paradox of thrift happens when many people save more and spend less, so businesses lower prices.

Question 43

The hands-on camp generally believes that

A) market failure is worse than government failure.
B) markets adjust quickly.
C) external events are the major cause of business cycles.
D) supply creates its own demand.
E) demand creates its own supply.

Question 44

The effects of the Great Depression lasted over 10 years.

Question 45

Mortgages issued to people who cannot really afford houses are called variable rate mortgages.

Question 46

Which Canadian political party is most likely to support a hands-off approach by government?

A) Conservative Party of Canada
B) Liberal Party of Canada
C) Bloc Quebecois
D) New Democratic Party
E) Green Party

Question 47

Mortgages issued to people who cannot really afford houses are called sub-prime mortgages.

Question 48

Households are sellers in input markets.

Question 49

The Great Depression lasted for less than 24 months.

Question 50

In the circular flow of economic life, the government cannot buy products in output markets.

Question 51

Which Canadian political party is least likely to support a hands-on approach by government?

A) Liberal Party of Canada
B) Conservative Party of Canada
C) Bloc Quebecois
D) New Democratic Party
E) Green Party

Question 52

There is market failure when market outcomes are

A) inefficient.
B) inequitable.
C) fail to serve the public interest.
D) all of the above.
E) none of the above.

Question 53

In the circular flow of economic life, the government sets the rules of the game.

Question 54

The hands-on camp generally believes that

A) government is part of the problem.
B) capitalism is better than socialism.
C) markets quickly self-adjust.
D) supply creates its own demand.
E) macroeconomic and microeconomic outcomes are different.

Question 55

The hands-on camp generally believes that

A) government failure is worse than market failure.
B) markets quickly self-adjust.
C) that external events are the major cause of business cycles.
D) that government failure causes business cycles.
E) in the fallacy of composition.

Question 56

The hands-off camp generally believes that

A) market failure is worse than government failure.
B) markets fail to quickly self-adjust.
C) external events are major causes of business cycles.
D) macroeconomic and microeconomic outcomes are different.
E) demand creates its own supply.

Question 57

Say's Law advises, "Be true to your school."

Question 58

The hands-off camp generally believes that

A) the world is ending in 2018.
B) markets do not self-adjust.
C) markets quickly self-adjust.
D) demand creates its own supply.
E) markets do not exist.

Question 59

The hands-off camp generally believes that

A) government is part of the solution.
B) socialism is better than capitalism.
C) markets fail to quickly self-adjust.
D) supply creates its own demand.
E) macroeconomic and microeconomic outcomes are different.

Question 60

In the circular flow of economic life, businesses set the rules of the game.

Question 61

There is government failure when

A) policymakers are captured by special interest groups.
B) a minority government is defeated in the House of Commons.
C) government policy serves the public interest.
D) economists lie to politicians.
E) markets quickly self-adjust.

Question 62

The hands-off camp generally believes that business cycles are caused by

A) government policy.
B) banking.
C) expectations.
D) money.
E) connection failures between input and output markets.

Question 63

Price stability is not a desirable macroeconomic outcome.

Question 64

The hands-on camp generally believes that business cycles are caused by

A) government policy.
B) government failure.
C) Say's Law.
D) external events
E) connection failures between input and output markets.

Question 65

J.B. Say would probably vote for the New Democratic Party in Canada.

Question 66

Market failure happens when government fails to serve the market's interests.

Question 67

There is government failure when

A) policymakers are captured by special interest groups.
B) policymakers make mistakes based on poor information.
C) government policy fails to serves the public interest.
D) lobbying and political pressure cause government to act for special interest groups.
E) all of the above.

Question 68

The hands-off camp generally believes that business cycles are caused by

A) external events.
B) banking.
C) expectations.
D) money.
E) connection failures between input and output markets.

Question 69

The hands-off camp generally believes that

A) supply creates its own demand.
B) governments never fail.
C) markets never fail.
D) demand creates its own supply.
E) connection failures between input and output markets cause business cycles.

Question 70

If J.B. Say were alive today and voted in Canadian elections, he would probably support the

A) Conservative Party of Canada.
B) Liberal Party.
C) Bloc Quebecois.
D) Green Party.
E) New Democratic Party.

Question 71

Macroeconomists agree

A) that prices and markets adjust, but differ on how long it takes.
B) that business cycles happen even without government failure.
C) that there is some role for government, but differ on how big a role.
D) on all of the above.
E) on none of the above.

Question 72

Government failure can occur if policymakers make "honest mistakes."

Question 73

Government failure can make business cycles worse.

Question 74

Who said, "In the long run, we are all dead?"

A) J.M. Keynes
B) J.B. Say
C) J.K. Rowling
D) G.B. Shaw
E) D. Vader

Question 75

The hands-off camp believes that business cycles can be caused by government mistakes.

Question 76

The hands-on camp generally believes that business cycles are caused by

A) irrational investors.
B) banking.
C) expectations.
D) money.
E) all of the above answers.

Question 77

During the Global Financial Crisis, all of the following measures fell except

A) housing prices.
B) stock prices.
C) unemployment.
D) economic growth.
E) asset prices.

Question 78

The hands-on camp generally believes that business cycles are caused by

A) government policy.
B) government failure.
C) expectations.
D) external events
E) economists.

Question 79

Which outcome is not part of the fundamental macroeconomic question?

A) a strong Canadian dollar
B) stable prices
C) low unemployment
D) full employment
E) steady growth in living standards

Question 80

Macroeconomists

A) agree that prices and markets adjust.
B) differ on how long it takes for prices and markets to adjust.
C) agree that business cycles happen even without government failure.
D) agree that there is some role for government.
E) differ on how big a role government should play in economic policy.
F) all of the above.