macro mult choice
Which of the following best explains productivity? Select one: Productivity is equal to real GDP per person. Productivity is the quantity of goods or services that a worker can produce in one hour. Productivity is equal to nominal GDP per person. Productivity is the growth rate of real GDP per person.
Productivity is the quantity of goods or services that a worker can produce in one hour.
A country reported a nominal GDP of $85 billion in 2007 and $100 billion in 2006, and reported a GDP deflator of 100 in 2007 and 105 in 2006. What happened to real output and prices from 2006 to 2007? Real output rose and prices fell Real output fell and prices rose. Real output and prices both fell. Real output and prices both rose
Real output and prices both fell
Suppose the average price of gas in 2009 was $0.95 per litre and $0.97 in 2010. The inflation rate was 3 percent in 2010. What was the 2010 price of gas in 2009 dollars? Select one: $0.922 $0.999 $0.941 $0.978
$0.941
In 1969 Don bought a Dodge Dart for $2,500. He drove this car until 2006, when he bought a Honda Civic for $22,000. If the price index in 1969 was 36.7 and the price index in 2006 was 190, what is the price of the Dodge Dart in 2006 prices? Select one: $9,762 $12, 943 $4,500 $3,583
$12, 943
Suppose that the reserve ratio is 5 percent and that a bank has $3000 in deposits. What are its required reserves? Select one: $150 $1500 $50 $500
$150
Country Z does not trade with any other country. Its GDP is $20 billion. Its government purchases $3 billion worth of goods and services each year, collects $3 billion in taxes, and provides $2 billion in transfer payments to households. Private saving in Country Z is $4 billion. What is the investment in Country Z?[This question is tricky but you should have no problem once you figure out what the total government spending is]. Select one: $5 billion $4 billion $3 billion $2 billion
$2 billion
Suppose equilibrium exists in the market for loanable funds. Using the following table, what is the quantity of funds supplied in this market? GDP $8.7 trillion Consumption Spending $3.5 trillion Taxes minus Transfers $2.7 trillion Government Purchases $3.0 trillion Select one: $2.8 trillion $3.1 trillion. $2.5 trillion $2.2 trillion
$2.2 trillion
Mr. Smith collected pension benefits of $220 a month in 2008. If the price index rose from 90 to 105 in the period 2009-2010, what should his pension benefits for 2010 be? Select one: $253.00 $252.43 $231.00 $256.67
$256.67
In 1949 the city of Sherbrooke, Quebec, built a hospital for about $500 000. In 1987 the city restored its courthouse for about $2.4 million. A price index for nonresidential construction was 14 in 1949, 92 in 1987, and 114.5 in 2000. According to these numbers, what did the hospital cost approximately? Select one: a. $4.1 million in 2000 dollars, which is more than the cost of the courthouse restoration in 2000 dollars. b. $4.1 million in 2000 dollars, which is less than the cost of the courthouse restoration in 2000 dollars. c. $3.6 million in 2000 dollars, which is less than the cost of the courthouse restoration in 2000 dollars. d. $3.6 million in 2000 dollars, which is more than the cost of the courthouse restoration in 2000 dollars.
$4.1 million in 2000 dollars, which is more than the cost of the courthouse restoration in 2000 dollars.
In a given year, an economy has consumption of $4000, investment of $2000, government purchases of $1500, exports of $500, imports of $600, taxes of $1200, transfer payments of $400, and depreciation of $300. What is the GDP? $7600 $6400 $8900 $7400
$7400
If currency is $50 billion, chequable deposits $700 billion, other minor, less liquid categories $300 billion, and credit card debt $500 billion, how much is M1? Select one: $1000 billion $750 billion $1050 billion $1550 billion
$750 billion
Andrew is offered a job in Calgary where the CPI is 120 and a job in Toronto where the CPI is 150. Andrew's job offer in Calgary is for $65,000. Which of the following salaries would the Toronto job have to pay so that both jobs would have the same purchasing power? Select one: $75,065 $65,625 $52,000 $60,266 $81,250
$81,250
If the nominal interest rate is 5 percent and the rate of inflation is 10 percent, what is the real interest rate? Select one: 2 percent 5 percent -5 percent -2 percent
-5 percent
Suppose that in a closed economy GDP is equal to 15,000, taxes are equal to 2500, consumption equals 7500, and government expenditures equal 3000. What is public saving? Select one: -600 600 -500 500
-500
Suppose that in a closed economy GDP is equal to 10,000, taxes are equal to 2500, consumption equals 6500, and government expenditures equal 2000. What is private saving? Select one: 750 1000 1500 500
1000
The price index in the first year is 125, in the second year is 150, and in the third year is 200. What is the inflation rate between the first and second year and between the second and third year? Select one: 25 percent between the first and second year, 75 percent between the second and third year. 25 percent between the first and second year, 50 percent between the second and third year. 20 percent between the first and second year, 33 percent between the second and third year. 50 percent between the first and second year, 100 percent between the second and third year
20 percent between the first and second year, 33 percent between the second and third year.
In examining the national income accounts of the closed economy of Country Y, you see that it in 2007 it had taxes of $100 billion, transfers of $40 billion, and government purchases of goods and services of $80 billion. You also notice that in 2006 it had private saving of $50 billion and investment of $70 billion. In which year did Country Y have a budget deficit of $20 billion? Select one: 2007 but not 2006 2006 but not 2007 2007 and 2006 neither 2006 nor 2007
2007 but not 2006
The market basket used to calculate the CPI in Happyland is 4 loaves of bread, 6 litres of milk, 2 shirts, and 2 pairs of pants. In 2005 the price of bread was $1.00 per loaf, the price of milk was $1.50 per litre, the price of a shirt was $6.00, and the price of a pair of pants was $10.00. In 2006 the price of bread was $1.75 per loaf, the price of milk was $2.25 per litre, the price of a shirt was $7.50, and the price of a pair of pants was $13.00. What was the inflation rate, as measured by the CPI, for Happyland between 2005 and 2006? Select one: 30 percent 24.4 percent 36.67 percent 20 percent
36.67 percent
Suppose that in a closed economy GDP is equal to 25,000, taxes are equal to 2156, consumption equals 7500, and government expenditures equal 6013, what is the budget deficit?
3857
In country Z, the CPI in 2005 was 140 and the CPI in 2006 was 154. Jake, a resident of country Z, borrowed money in 2005 and repaid the loan in 2006. If the nominal interest rate on the loan was 14 percent, what was the real interest rate? Select one: 18 percent 10 percent 4 percent 14 percent
4 percent
Last year, real GDP in Oceania was $620 billion and the population was 2.3 million. The year before, real GDP was $502.0 billion and the population was 2.0 million. What was the approximate growth rate of real GDP per capita. Select one: 7 percent 10 percent 16 percent 13 percent 8.5 percent
7 percent
If the inflation rate is 3 percent and the real interest rate is 5 percent, what is the nominal interest rate? Select one: 8 percent 5 percent 2 percent 3 percent
8 percent
If the real interest rate is 7 percent and the expected inflation rate is 2 percent, what would a person expect to have after a year? Select one: 9 percent more dollars, which will purchase 5 percent more goods. 7 percent more dollars, which will purchase 9 percent more goods. 2 percent less dollars, which will purchase 7 percent more goods 5 percent more dollars, which will purchase 9 percent less goods 10 percent more dollars, which will purchase 6 percent more goods. 9 percent more dollars, which will purchase 7 percent more goods. 5 percent more dollars, which will purchase 9 percent more goods.
9 percent more dollars, which will purchase 7 percent more goods.
In 1964 in London, Ontario, one could buy a chili dog and a root beer for $1.25; today the same chili dog and root beer cost $3.75. Which of the following sets of CPIs would mean that the cost in today's dollars was the same as in 1964? Select one: 60 in 1964 and 141.6 today. 90 in 1964 and 270 today. 75 in 1964 and 126.4 today. 80 in 1964 and 112 today.
90 in 1964 and 270 today.
Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth? Select one: Abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living. Some countries can be rich mostly because of their natural resources, and countries without natural resources need not be poor, but can never have very high standards of living. A country with no or few domestic natural resources is destined to be poor. Differences in natural resources have virtually no role in explaining differences in standards of living.
Abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living.
How is GDP computed? a) Add up the cost of producing final goods and services. b) Use weights determined by a survey regarding how much people value different sorts of goods and services to compute GDP as a weighted average. c) Add up the market values of all final goods and services produced within a country in a given period of time. d) Add up the quantities of all final goods and services.
Add up the market values of all final goods and services produced within a country in a given period of time.
Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. Which of the following will happen in the long run? Select one: Both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with more capital. Both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital. Both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with less capital. Both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital.
Both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital.
If a Canadian household buys a $75 handbag in Italy, Canadian consumption increases by $75. What happens to Canadian imports/exports and GDP? a) Canadian exports increase by $75, and Canadian GDP increases by $75. b) Canadian imports increase by $75, but Canadian GDP is unaffected. c) Canadian imports increase by $75, and Canadian GDP increases by $75. d) Canadian imports are unaffected, and Canadian GDP is unaffected.
Canadian imports increase by $75, but Canadian GDP is unaffected.
A German citizen buys an automobile produced in Canada by a Japanese company. What happens as a result? a) Canadian net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GDP and GNP are unaffected. b) Canadian net exports increase, Canadian GNP and GDP are unaffected, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected. c) Canadian net exports, GNP, and GDP increase; Japanese GDP increases; German net exports decrease; and German GDP is unaffected. d) Canadian net exports, GNP, and GDP are unaffected; Japanese GNP increases; German net exports decrease; and German GDP and GNP decrease.
Canadian net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GDP and GNP are unaffected.
Suppose that real GDP grew more in Country A than in Country B last year. Which of the following does this imply concerning productivity or standard of living? Select one: Country A's productivity must have grown faster than country B's. Country A must have a higher standard of living than country B. Country A's productivity must have been higher only if the population in the two countries grew at the same rate. Country A must have a higher real GDP than Country B.
Country A's productivity must have been higher only if the population in the two countries grew at the same rate.
Consider three different closed economies with the following national income statistics. Country A has taxes of $40 billion, transfers of $20 billion, and government expenditures on goods and services of $30 billion. Country B has private savings of $60 billion, and investment expenditures of $50 billion. Country C has GDP of $300 billion, investment of $70 billion, consumption of $180 billion, taxes of $60 billion, and transfers of $20 billion. Based on this information, which country has a $10 billion deficit? Select one: Country A Country B Country C All the three countries.
Country C All the three countries.
What does diminishing returns to capital imply? Select one: New ideas are not as useful as old ideas. Capital produces fewer goods as it ages. Increases in the capital stock eventually decrease output. Increases in the capital stock increase output by ever smaller amounts.
Increases in the capital stock increase output by ever smaller amounts.
Fred is considering expanding his dress shop. Which of the following will happen if interest rates rise? Select one: He is more likely to expand. This illustrates why the supply of loanable funds slopes upward. He is more likely to expand. This illustrates why the demand for loanable funds slopes upward. He is less likely to expand. This illustrates why the demand for loanable funds slopes downward. He is less likely to expand. This illustrates why the supply of loanable funds slopes downward.
He is less likely to expand. This illustrates why the demand for loanable funds slopes downward.
Laurie works 8 hours and produces 7 units of goods per hour. Iris works 6 hours and produces 10 units of goods per hour. Which of the following can we conclude? Select one: a. Iris's productivity and output are greater than Laurie's. b. Iris's productivity is greater that Laurie's, but Iris's output is less. c. Laurie's productivity and output are greater that Iris's. d. Laurie's productivity is greater than Iris's, but Laurie's output is less.
Iris's productivity and output are greater than Laurie's.
A central bank raised the reserve requirement ratio from 10 percent to 12 percent. Other things the same, how does the money multiplier change? Select one: It decreases by 1.67 It decreases by 2. It increases by 2 It increases by 1.67
It decreases by 1.67
Suppose a bank has a 20 percent reserve ratio, $2500 in deposits, and it loans out all it can, given the reserve ratio. Which of the following describes the bank's assets? Select one: It has $50 in reserves and $2500 in loans. It has $500 in reserves and $2000 in loans. It has $500 in reserves and $2500 in loans. It has $50 in reserves and $2450 in loans
It has $500 in reserves and $2000 in loans.
Over the past few decades Canadians have chosen to cook less at home and eat more at restaurants. What effect has this practice had on GDP? It has not affected measured GDP. It has increased measured GDP. It has reduced measured GDP. It has had an ambiguous effect on GDP
It has increased measured GDP.
Which of the following characterizes fiat money? Select one: It is backed by gold. It has intrinsic value equal to its value in exchange. It is an illiquid asset. It has no intrinsic value.
It has no intrinsic value.
When unions raise wages in some sectors of the economy, which of the following happens to the supply of labour in other sectors of the economy? Select one: It decreases, reducing wages in industries that are not unionized. It increases, raising wages in industries that are not unionized. It decreases, raising wages in industries that are not unionized. It increases, reducing wages in industries that are not unionized.
It increases, reducing wages in industries that are not unionized.
Greg, a Canadian citizen, works only in the United States. How does the value added to production from his employment impact GDP and GNP? It is included only in Canadian GNP. It is not included in either Canadian GDP or Canadian GNP It is included only in Canadian GDP. It is included in both Canadian GDP and Canadian GNP.
It is included only in Canadian GNP.
Which of the following characterizes commodity money? Select one: It is comprised of receipts created in international trade that are used as a medium of exchange. It is money with intrinsic value It is the principal type of money in use today. It is money that is backed by gold.
It is money with intrinsic value
Which of the following best defines the natural rate of unemployment? Select one: It is the unemployment rate that would prevail with zero inflation It is the rate associated with the highest possible level of GDP. It is the difference between long-run and short-run unemployment rates. It is the amount of unemployment that the economy normally experiences.
It is the amount of unemployment that the economy normally experiences.
Assuming that other things remain the same, what effect does a government budget deficit have on saving? Select one: It increases both private and national saving. It reduces both public and national saving. It reduces private saving, but increases national saving. It increases public saving but reduces national saving.
It reduces both public and national saving.
If real GDP doubles and the GDP deflator doubles, what will happen to nominal GDP? It will stay the same. It will quadruple. It will double. It will triple.
It will quadruple
f the number of workers in an economy doubled, all other inputs stayed the same, and there were constant returns to scale, what would happen to productivity? [This question is tricky and requires you to think very carefully about what happens to productivity] Select one: It would rise but less than double. It would stay the same. It would fall to half its former value. It would fall but by less than half.
It would fall but by less than half.
If the minimum wage was currently above the equilibrium wage, what would a decrease in the minimum wage do to the quantity demanded and quantity supplied of labour? Select one: It would decrease the quantity of labour demanded and increase the quantity supplied. It would decrease both the quantity demanded and the quantity supplied of labour. It would increase the quantity of labour demanded and decrease the quantity supplied. It would increase both the quantity demanded and the quantity supplied of labour.
It would increase the quantity of labour demanded and decrease the quantity supplied.
If the production function for an economy had constant returns to scale, the labour force doubled, and all other inputs stayed the same, what would happen to real GDP? Select one: It would increase, but by something less than double. It would increase by 50 percent. It would stay the same. It would double.
It would increase, but by something less than double.
Which of the following people would NOT be included in the labour force? Select one: Beth, who is waiting for her new job at the bank to start. Dave, who does not have a job, but is looking for work. Karen, who works most of the week in a steel factory. Jeremiah, who does only voluntary work for charity organizations.
Jeremiah, who does only voluntary work for charity organizations.
Which one of the following people would be counted as unemployed according to official statistics? Select one: James, who has just graduated from university and is taking a well-deserved long vacation Brian, a full-time student who is not looking for work. Kate, who is on a temporary layoff Heath, who has retired and is not looking for work.
Kate, who is on a temporary layoff
Nancy is searching for a job that suits her tastes about where to live and the people she works with. Laura is looking for a job that makes best use of her skills. Which of the following best describes the nature of Nancy and Laura's unemployment? Select one: Nancy is frictionally unemployed, and Laura is structurally unemployed. Nancy and Laura are both structurally unemployed. Nancy is structurally unemployed, and Laura is frictionally unemployed. Nancy and Laura are both frictionally unemployed.
Nancy and Laura are both frictionally unemployed.
In a closed economy, how does national saving compare with investment? Select one: National saving is usually greater than investment. National saving is usually less than investment. National saving is equal to investment. National saving is usually less than investment because of the leakage of taxes.
National saving is equal to investment.
If there is shortage of loanable funds, which of the following is most likely to happen? Select one: Neither curve shifts, but the quantity of loanable funds supplied decreases and the quantity demanded increases as the interest rate falls to equilibrium. The supply for loanable funds shifts left and the demand shifts right. The supply for loanable funds shifts right and the demand shifts left. Neither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium
Neither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium
Which of the following best explains the logic behind the catch-up effect? Select one: Poor countries tend to save a higher share of their income than rich countries. New capital adds more to production in a country that doesn't have much capital than in a country that already has much capital. The capital stock in rich countries deteriorates at a higher rate because it already has a lot of capital. Workers in countries with low incomes will work more hours than workers in countries with high incomes.
New capital adds more to production in a country that doesn't have much capital than in a country that already has much capital.
Suppose that Nova Scotia produces cheese and fish. In 2010, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. In 2006, the base year, the price of cheese was $10 per unit, and the price of fish was $75 per unit. What can we conclude? a. Nominal GDP is $500, real GDP is $800, and the GDP deflator is 160 b. Nominal GDP is $800, real GDP is $500, and the GDP deflator is 160 c. Nominal GDP is $500, real GDP is $800, and the GDP deflator is 62.5 d. Nominal GDP is $800, real GDP is $500, and the GDP deflator is 62.5
Nominal GDP is $500, real GDP is $800, and the GDP deflator is 62.5
What is the difference between nominal and real GDP? a) Nominal GDP values production at market prices, while real GDP values production at the cost of the resources used in the production process. b) Nominal GDP values production at current prices, while real GDP values production at constant prices. c) Nominal GDP consistently underestimates the value of production, while real GDP consistently overestimates the value of production. d) Nominal GDP values production at constant prices, while real GDP values production at current prices.
Nominal GDP values production at current prices, while real GDP values production at constant prices.
Babe Ruth, the famous baseball player, earned $80 000 in 1931. Today, the best baseball players can earn 200 times as much as Babe Ruth in 1931. However, prices have also risen since 1931. What can we conclude from this information? Select one: a. One cannot determine whether baseball stars today enjoy a higher standard of living than Babe Ruth did in 1931 without additional information regarding increases in prices since 1931. b. The best baseball players today are better off than Babe Ruth was in 1931. c. Because prices have also risen, the standard of living of baseball stars hasn't changed since 1931. d. One cannot make judgments about changes in the standard of living based on changes in prices and changes in incomes.
One cannot determine whether baseball stars today enjoy a higher standard of living than Babe Ruth did in 1931 without additional information regarding increases in prices since 1931.
Suppose that an economy with constant returns to scale doubled its physical capital stock, doubled its available natural resources, and doubled its human capital, but kept the size of the labour force the same. How does the change in output compare to the change in productivity? [CLUE: This question requires you to think very carefully about productivity and the implications of constant returns to scale] Select one: Output would stay the same and so would its productivity. Output and productivity would increase, but by less than double. Output would increase by less than double, but productivity would double. Output and productivity would increase by more than double.
Output and productivity would increase, but by less than double.
One of the Ten Principles of Economics is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. What is the opportunity cost of that capital accumulation? Select one: People need to consume less goods and services now in order to enjoy more consumption in the future. People need to recycle resources so that future generations can produce goods and services with the accumulated capital. People need to work longer hours, thus having less time for leisure. People need to devote less time in school and more at work.
People need to consume less goods and services now in order to enjoy more consumption in the future.
A movie company makes 500 000 DVDs in the second quarter. It sells 300 000 of them before the end of the second quarter, and holds the others in its warehouse. How is the second quarter GDP affected? a) The DVDs will be counted as a change in inventory in the second quarter, and when sold in the third quarter will raise GDP. b) The DVDs are included in second-quarter GDP. c) Since all the 500 000 DVDs will eventually be bought by consumers, they are included as consumption in the third quarter. d) The DVDs that are not purchased in the second quarter are not counted in the second-quarter GDP.
The DVDs are included in second-quarter GDP.
Which of the following is an important difference between the GDP deflator and the consumer price index? Select one: a. The GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consumer price index reflects the prices of some goods and services bought by consumers. b. The GDP deflator reflects the prices of goods and services bought by producers, whereas the consumer price index reflects the prices of goods and services bought by consumers. c. The GDP deflator reflects the prices of all final goods and services produced by a nation's citizens, whereas the consumer price index reflects the prices of final goods and services bought by consumers. d. The GDP deflator reflects the prices of all goods and services bought by producers and consumers, whereas the consumer price index reflects the prices of final goods and services bought by consumers.
The GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consumer price index reflects the prices of some goods and services bought by consumers.
If the prices of Australian-made shoes imported into Canada increase, what happens to the GDP deflator and the consumer price index? Select one: a. The consumer price index will increase, but the GDP deflator will not increase. b. The GDP deflator will increase, but the consumer price index will not increase. c. Neither the GDP deflator nor the consumer price index will increase. d. Both the GDP deflator and the consumer price index will increase.
The consumer price index will increase, but the GDP deflator will not increase.
Consider these facts: (1) Some people who are employed or who are not making a serious effort to find employment will report themselves as unemployed. (2) Some people who want to find work will be counted as out of the labour force. How do these facts affect the reported unemployment rate? Select one: The first fact tends to make the reported unemployment rate lower than the actual unemployment rate. The second fact tends to make the reported unemployment rate higher than the actual rate. The first fact tends to make the reported unemployment rate higher than the actual unemployment rate. The second fact tends to make the reported unemployment rate lower than the actual rate. Both the first and the second facts tend to make the reported unemployment rate higher than the actual unemployment rate. Both the first and the second facts tend to make the reported unemployment rate lower than the actual unemployment rate.
The first fact tends to make the reported unemployment rate higher than the actual unemployment rate. The second fact tends to make the reported unemployment rate lower than the actual rate.
regarding the categories of unemployment, how does a minimum-wage law compare to firms paying higher-than-equilibrium wages? Select one: The minimum wage and firms paying wages above equilibrium both create frictional unemployment. The minimum wage and firms paying wages above equilibrium both create structural unemployment. The minimum wage creates frictional unemployment, while firms paying wages above equilibrium create structural unemployment. The minimum wage creates structural unemployment, while firms paying wages above equilibrium create frictional unemployment.
The minimum wage and firms paying wages above equilibrium both create structural unemployment.
Suppose the reserve ratio is 20 percent and the public holds $10 million in cash. Then the public decides to withdraw $5 million from the banks. How does the money supply eventually change? Select one: The money supply falls by $35 million The money supply falls by $5 million. The money supply falls by $25 million. The money supply falls by $10 million.
The money supply falls by $25 million.
f the current market interest rate for loanable funds is below the equilibrium level, which of the following is most likely to happen? Select one: The quantity of loanable funds demanded will exceed the quantity of loanable funds supplied and the interest rate will fall. The quantity of loanable funds supplied will exceed the quantity of loanable funds demanded and the interest rate will fall. The quantity of loanable funds supplied will exceed the quantity of loanable funds demanded and the interest rate will rise. The quantity of loanable funds demanded will exceed the quantity of loanable funds supplied and the interest rate will rise.
The quantity of loanable funds demanded will exceed the quantity of loanable funds supplied and the interest rate will rise.
according to the traditional view, in what direction is the slope of the production function, with capital per worker on the horizontal axis and output per worker on the vertical axis? Select one: The slope is positive and becomes flatter as capital per worker rises. The slope is negative and becomes steeper as capital per worker rises. The slope is constant. The slope is positive and becomes steeper as capital per worker rises.
The slope is positive and becomes flatter as capital per worker rises.
Suppose that some people are counted as unemployed when, to maintain unemployment compensation, they search for work only at places where they are unlikely to be hired. If these individuals were counted as out of the labour force instead of as unemployed, how would the labour statistics change? Select one: The unemployment rate would be lower, and the labour-force participation rate would be higher. The unemployment rate would be higher, and the labour-force participation rate would be lower.' The unemployment rate and the labour-force participation rate would be lower. The unemployment rate and the labour-force participation rate would be higher.
The unemployment rate and the labour-force participation rate would be lower.
With respect to GDP, how are transfer payments treated? a. They are included in GDP because they represent income to individuals b. They are not included in GDP because taxes will have to be raised to pay for them. c. They are not included in GDP because they are not payments for currently produced goods or services. d. They are included in GDP because the income will be spent for consumption.
They are not included in GDP because they are not payments for currently produced goods or services.
Tom is looking for work after school, but everywhere he fills out an application he is told that so have lots of others. Simon has a law degree. Several firms have made him offers, but he thinks he might be able to find a firm where his talents could be put to better use. Which categories of unemployment do Tom and Simon belong to? Select one: Tom is structurally unemployed, and Simon is frictionally unemployed. Tom is frictionally unemployed, and Simon is structurally unemployed. Tom and Simon are both structurally unemployed. Tom and Simon are both frictionally unemployed.
Tom is structurally unemployed, and Simon is frictionally unemployed.
Which of the following expressions represents national saving in a closed economy? Select one: Y - I - G - NX Y-I-G G + C - Y Y - C - G
Y - C - G
Which of the following equations will always represent GDP in an open economy? Select one: Y = C + I + G + NX Y = C + I + G S = I - G I = Y - C + G
Y = C + I + G + NX
if there are constant returns to scale, how is the production function written? Select one: L = AF(Y, K, H, N) Y/L = A F( 1, K/L, H/L, N/L) Y/L = A F(xL, xK, xH, xN) xY = 2xAF(L, K, H, N)
Y/L = A F( 1, K/L, H/L, N/L)
Which of the following would an increase in the budget deficit most likely cause? Select one: a shortage of loanable funds at the original interest rate, which would lead to falling interest rates. a shortage of loanable funds at the original interest rate, which would lead to rising interest rates. a surplus of loanable funds at the original interest rate, which would lead to falling interest rates. a surplus of loanable funds at the original interest rate, which would lead to rising interest rates.
a shortage of loanable funds at the original interest rate, which would lead to rising interest rates.
In 2000 in Japan, based on concepts similar to those used to compute Canadian employment statistics, the unemployment rate was about 4.8 percent, the labour force participation rate was about 62 percent, and the adult population was about 108 million. How many people were employed? Select one: about 67 million about 64 million about 103 million about 52 million
about 64 million
How may the Bank of Canada influence the price level? Select one: by conducting open-market purchases and raising the bank rate by conducting open-market sales and lowering the bank rate by conducting open-market purchases and lowering the bank rate by conducting open-market sales and raising the bank rate
by conducting open-market purchases and lowering the bank rate
How is the unemployment rate computed? Select one: by dividing the number of unemployed by the number of persons in the labour force by determining the number of unemployed in the population aged 18 and older by counting the number of unemployment insurance claims filed by counting the number of working-age persons who don't have a job
by dividing the number of unemployed by the number of persons in the labour force
How is a nation's standard of living determined? Select one: by its productivity. by its national income. by how much it has relative to others. by its gross domestic product
by its productivity.
Suppose you bake cookies. One day, you double the time you spend; double the number of chocolate chips, flour, eggs, and all your other inputs; and bake twice as many cookies. What kind of production function is this? Select one: decreasing returns to scale. zero returns to scale. constant returns to scale. increasing returns to scale.
constant returns to scale.
What is a valid policy to use for increasing the rate of economic growth? Select one: increase the fraction of GDP devoted to consumption. reduce reliance on market forces because they allocate goods and services in an unfair manner. encourage trade with neighbouring countries. restrict investment in domestic industries by foreigners because they take some of the profits out of the country.
encourage trade with neighbouring countries. restrict investment in
If you currently make $25 000 a year and the CPI rises from 110 today to 150 in five years, then you need to be making $35 000 to have kept pace with consumer price inflation. Select one: True False
false
The GDP deflator is calculated by dividing the real GDP by the nominal GDP. true false
false
A Canadian company owns a fast food restaurant in Romania. Where is the value of goods and services it produces included ? in Romanian GDP, but not Canadian GDP in both Romanian and Canadian GDP in Canadian GDP, but not Romanian GDP partly in Romanian GDP and partly in Canadian GDP
in Romanian GDP, but not Canadian GDP
The use of a law or contract to automatically correct a dollar amount for the effects of inflation is called
indexation
What is the effect of a higher saving rate in the long run? Select one: It increases productivity. People must consume less in the future. It decreases the capital stock. It leads to higher growth in real GDP.
it increases productivity.
Which of the following lists contains only actions that increase the money supply? Select one: raising the bank rate; raising the reserve ratio raising the bank rate; lowering the reserve ratio lowering the bank rate; raising the reserve ratio lowering the bank rate; lowing the reserve ratio
lowering the bank rate; lowing the reserve ratio
In a closed economy, what does (Y - T - C) represent? public saving national saving Investment government tax revenue private saving
private saving
What is the source of the supply of and demand for loanable funds, respectively? Select one: investment and investment investment and saving saving and saving saving and investment
saving and investment
Which of the following is included in M2 but not in M1? Select one: demand deposits currency savings deposits gold
savings deposits
Which of the following is cyclical unemployment closely associated with? Select one: short-run ups and downs of the economy. seasonal fluctuations in spending. fluctuations in the natural rate of unemployment.
short-run ups and downs of the economy.
In computing GDP, what is investment? a. spending on capital equipment, inventories, and structures, excluding household purchases of new housing b. spending on new capital equipment, inventories, and structures, including new housing Correct c. spending on real estate and financial assets d. spending on stocks, bonds, and other financial assets
spending on new capital equipment, inventories, and structures, including new housing
The economic development minister of a country has a list of things she thinks may explain her country's low growth of real GDP per person relative to other countries. She asks you to pick the one you think most likely explains her country's low growth. Which of the following contributes to low growth? Select one: encouraging foreign investment. strong private property rights. low population growth. tariffs and quotas
tariffs and quotas
Which of the following is the correct definition of GDP? a)the market value of all final goods and services consumed within a country over a number of years. b) the market value of all final goods and services produced by the citizens of a country. c) the market value of all final goods and services produced within a country in a given period of time. d) the market value of all goods produced within a country.
the market value of all final goods and services produced within a country in a given period of time.
Which of the following best defines the inflation rate? Select one: a. the percentage change in the price b. level from the previous period. the change in the price level. c. the price level divided by the price level in the previous period. d. the price level.
the percentage change in the price level from the previous period.
What does the labour-force participation rate measure? Select one: the percentage of the total adult population that is employed the percentage of the labour force that is either employed or unemployed the percentage of the labour force that is employed. the percentage of the total adult population that is in the labour force.
the percentage of the total adult population that is in the labour force.
What does the slope of the supply of loanable funds curve represent? Select one: the positive relation between the real interest rate and investment. the negative relation between the real interest rate and investment. the positive relation between the real interest rate and saving. the negative relation between the real interest rate and saving.
the positive relation between the real interest rate and saving.
For any given year, what is the CPI? Select one: the price of the basket of goods and services in the given year divided by the price of the basket in the base year, then multiplied by 100. the price of the basket of goods and services in the previous year divided by the price of the basket in the given year, then multiplied by 100. the price of the basket of goods and services in the base year divided by the price of the basket in the given year, then multiplied by 100. the price of the basket of goods and services in the given year divided by the price of the basket in the previous year, then multiplied by 100.
the price of the basket of goods and services in the given year divided by the price of the basket in the base year, then multiplied by 100.
Economists generally believe that outward-oriented policies are more likely to foster growth than inward-oriented policies. Select one: True False
true
Suppose that in 2013, the demand for construction workers increased and the demands for textile and steel workers diminished. Which of the following types of unemployment does this situation illustrate? Select one: frictional unemployment created by efficiency wages. structural unemployment created by efficiency wages. structural unemployment created by a sectoral shift. frictional unemployment created by a sectoral shift.
unemployment created by a sectoral shift.
When will a change in the tax laws that increases the supply of loanable funds have a bigger effect on investment? Select one: when both the demand for and supply of loanable funds are more inelastic. when both the demand for and supply of loanable funds are more elastic. when the demand for loanable funds is more elastic and the supply of loanable funds is more inelastic. when the demand for loanable funds is more inelastic and the supply of loanable funds is more elastic.
when the demand for loanable funds is more elastic and the supply of loanable funds is more inelastic.
