Question 1

Economic booms can cause problems as well as create benefits because they are often accompanied by

Accepted Answer

A)  deflationary pressures.
B)  excessive labour-force participation.
C)  inflationary pressures.
D)  pressure on the government budget deficit to rise.
E)  rising real interest rates.

Question 2

A worker is considered unemployed if that worker has no job,is legally eligible to work,

Accepted Answer

A)  and is actively searching for employment.
B)  and is not collecting unemployment insurance.
C)  whether the worker is looking for a job or is not looking for a job.
D)  but only if they previously held a job.
E)  but only if they were previously employed for at least three consecutive months.

Question 3

Which of the following correctly describes the meaning of the expression Y > Y*?

Accepted Answer

A)  actual output is more than potential output - a recessionary gap
B)  potential output is more than actual output - a recessionary gap
C)  actual output is more than potential output - an inflationary gap
D)  potential output is more than actual output - an inflationary gap

Question 4

Suppose Canada's exchange rate with the U.S.dollar falls from 1.21 to 1.13.This fall indicates a(n) ________ of the Canadian dollar,which means it takes ________ Canadian dollars to purchase one U.S.dollar.

Accepted Answer

A)  appreciation; more
B)  appreciation; fewer
C)  depreciation; more
D)  depreciation; fewer

Question 5

Suppose Canada's exchange rate with the U.S.dollar increases from 1.14 to 1.22.Which of the following is likely to happen?

Accepted Answer

A)  More Canadians will cross the border to shop in the U.S.
B)  It is less expensive for Canadians to shop online from U.S.retailers.
C)  Fewer Canadians will cross the border to shop in the U.S.
D)  The Canadian dollar value of Canada's imports from the U.S.will fall.
E)  The Canadian dollar value of Canada's exports to the U.S.will fall.

Question 6

Consider an economy in which existing capital is being used intensively,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)  boom
D)  recession
E)  slump

Question 7

What is the approximate measure (2017 data) of Canada's productivity in terms of real GDP per hour worked (expressed in 2007 dollars) ?

Accepted Answer

A)  $10
B)  $920
C)  $200
D)  $475
E)  $58

Question 8

Consider the situations of a lender of money and a borrower of money.Which of the following situations is least burdensome for the borrower?

Accepted Answer

A)  nominal interest rate of 15% and an inflation rate of 8%
B)  nominal interest rate of 10% and an inflation rate of 1%
C)  nominal interest rate of 8% and an inflation rate of 2%
D)  nominal interest rate of 4% and an inflation rate of 4%
E)  nominal interest rate of 29% and an inflation rate of 21%

Question 9

Which of the following is the best example of cyclical unemployment?

Accepted Answer

A)  A worker is laid off because his firm had to reduce production due to reduced demand.
B)  A worker quits her current job to search for a better one.
C)  An ironworker cannot find a job in Alberta because all job vacancies are in Quebec.
D)  Bank tellers are unable to find jobs due to technological advances in the banking system.
E)  Inflationary pressures have led to higher wages for all jobs.

Question 10

Which of the following statements is correct?

Accepted Answer

A)  If the rate of inflation is high,the nominal rate of interest must be low.
B)  If the rate of inflation is less than the nominal interest rate,the real interest rate is positive.
C)  If the real interest rate is less than the nominal interest rate,inflation must be zero.
D)  If the real interest rate is less than the nominal interest rate,inflation must be negative.
E)  If the nominal interest rate is high,the real interest rate must be high.

Question 11

Which of the following is an accurate statement about real national income?

Accepted Answer

A)  It always equals nominal national income.
B)  It changes by the same amount and in the same direction as does nominal national income.
C)  It changes only when the underlying quantities of output change.
D)  It refers to national income with no adjustment for changes in prices.
E)  It refers to national wealth but is not an indicator of current production.

Question 12

Which group tends to be most hurt by unexpected inflation?

Accepted Answer

A)  banks
B)  individuals with unindexed pensions
C)  employers
D)  fixed-income earners
E)  Both B and D are correct.

Question 13

If nominal national income increased by 10% over a certain period of time while real national income increased by 20%,then

Accepted Answer

A)  everybody in the economy became worse off.
B)  inflation has occurred during this time period.
C)  the labour force increased by 10%.
D)  the price level has declined by about 10%.
E)  the price level has increased by approximately 10%.

Question 14

If a country's labour force is 15 million people,and 1.35 million of those are unemployed,the country's unemployment rate is

Accepted Answer

A)  2.5%.
B)  3.3%.
C)  4.5%.
D)  6.7%.
E)  9.0%.

Question 15

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.

Question 16

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.

Question 17

Consider a small economy with 2500 employed workers who worked a total of 5 million hours at an average wage of $40 per hour.Which of the following is the best measure of labour productivity in this economy?

Accepted Answer

A)  real GDP per hour worked = $40
B)  real GDP per employed worker = $80 000
C)  real GDP per hour worked = $80
D)  real GDP per employed worker = $125 000
E)  Not able to determine from the information provided

Question 18

Canada's unemployment rate has been as low as ________ in the 1960s and as high as ________ during the recession in the early 1980s.

Accepted Answer

A)  4.6%; 14%
B)  2.0%; 15%
C)  5.5%; 17%
D)  2.4%; 10%
E)  3.4%; 12%

Question 19

To compare the economy's aggregate output in two different time periods,economists compare the

Accepted Answer

A)  nominal national income for the two periods.
B)  potential national incomes for the two periods.
C)  real national income for the two periods.
D)  unemployment rates for the two periods.
E)  inflation rates for the two periods.

Question 20

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 output gap in 2015?

Accepted Answer

A)  $420 billion
B)  $418 billion
C)  -$2 billion
D)  -$20 billion
E)  $2 billion

Exam 19: What Macroeconomics Is All About

Canada's unemployment rate has been as low as ________ in the 1960s and as high as ________ during the recession in the early 1980s.

Correct AnswerverifiedShow Answer

Suppose Canada's exchange rate with the U.S.dollar falls from 1.21 to 1.13.This fall indicates a(n) ________ of the Canadian dollar,which means it takes ________ Canadian dollars to purchase one U.S.dollar.

Correct AnswerverifiedShow Answer

Consider a small economy with 2500 employed workers who worked a total of 5 million hours at an average wage of $40 per hour.Which of the following is the best measure of labour productivity in this economy?

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A worker is considered unemployed if that worker has no job,is legally eligible to work,

Correct AnswerverifiedShow Answer

To compare the economy's aggregate output in two different time periods,economists compare the

Correct AnswerverifiedShow Answer

What is the approximate measure (2017 data) of Canada's productivity in terms of real GDP per hour worked (expressed in 2007 dollars) ?

Correct AnswerverifiedShow Answer

Consider an economy in which existing capital is being used intensively,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?

Correct AnswerverifiedShow Answer

Which group tends to be most hurt by unexpected inflation?

Correct AnswerverifiedShow Answer

Suppose Canada's exchange rate with the U.S.dollar increases from 1.14 to 1.22.Which of the following is likely to happen?

Correct AnswerverifiedShow Answer

An example of a topic outside the scope of macroeconomics is

Correct AnswerverifiedShow Answer

Consider the situations of a lender of money and a borrower of money.Which of the following situations is least burdensome for the borrower?

Correct AnswerverifiedShow Answer

If a country's labour force is 15 million people,and 1.35 million of those are unemployed,the country's unemployment rate is

Correct AnswerverifiedShow Answer

Economic booms can cause problems as well as create benefits because they are often accompanied by

Correct AnswerverifiedShow Answer

Which of the following is an accurate statement about real national income?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following correctly describes the meaning of the expression Y > Y*?

Correct AnswerverifiedShow Answer

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 output gap in 2015?

Correct AnswerverifiedShow Answer

If nominal national income increased by 10% over a certain period of time while real national income increased by 20%,then

Correct AnswerverifiedShow Answer

Which of the following is the best example of cyclical unemployment?

Correct AnswerverifiedShow Answer

Canada's unemployment rate has been as low as in the 1960s and as high as during the recession in the early 1980s.

Correct Answer
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Suppose Canada's exchange rate with the U.S.dollar falls from 1.21 to 1.13.This fall indicates a(n) of the Canadian dollar,which means it takes Canadian dollars to purchase one U.S.dollar.

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