What Macroeconomics is all about

Positive net exports occur when:

exports are greater than imports

Suppose the CPI in 2012 was 215.3 and the CPI in 2013 was 214.6, what was the inflation rate between 2012 and 2013?

-0.3 percent

Which of these statements about interest rates and inflation is true?

If there is zero inflation, the nominal interest rate is equal to the real interest rate.

Which of these covers the study of topics such as inflation and unemployment?

Macroeconomics

Which of the following is true about the history of inflation in Canada?

The rate of inflation in Canada was particularly high in the mid-1970s, and again between 1980-1982, reaching about 11%.

The consumer price index is an index computed using prices of:

a fixed basket of goods used by the typical consumer

In calculating the CPI, the:

basket of goods does not include large equipment purchased by firms

The balance of trade is:

equal to the difference between exports of goods and imports of goods

The rise in the average level of all prices is the definition of the:

inflation rate

The consumer price index:

measures the cost of an unchanging basket of goods and services

Unemployment rates in developed countries around the world:

show substantial variation

The cycle of short-term ups and downs in the economy is called:

the business cycle

The point where economic activity bottoms out in a full business cycle is known as:

the trough

If the cost of a market basket of goods in 2002, the base year, is $200, and the cost of the same market basket is $300 in 2012, what is the CPI in 2012?

CPI2012 = (300 / 200) x 100 = 150

Which country is known for its long history of mostly having trade surpluses?

Canada

If the CPI was 207 in 2007 and 225 in 2011, what pay raise would someone who earned $50,000 in income in 2007 have to receive in order to keep her purchasing power constant in 2011?

Inflation rate = [(CPI1 - CPI0) / CPI0] x 100 = [(225 - 207) / 207] x 100 = 8.696. You can then multiply $50,000 x .08696 = $4,348. Her new salary will need to be $54,348 in order to maintain the same level of purchasing power.

Which of these is a macroeconomic study?

The study of how fast prices in general are rising.

Which of these are included in the labour force?

Those who are employed and those who are unemployed (looking for work)

Macroeconomics focuses on which of the following topics?

Unemployment, inflation, growth, and trade

The unemployment that occurs with the normal workings of the economy, such as workers taking time to search for suitable jobs and firms taking time to search for qualified employees, is called:

frictional unemployment

According to the graph, which period of time is the economy generally considered to be in an expansion phase of the business cycle?

from the trough to the peak (economic activity increasing)

One of the primary goals of most governments with regard to the economy is:

full employment

If the inflation rate is 6 percent and the nominal rate of interest is 4 percent, then the real interest rate is:

nominal = real + inflated (4-6=-2%)

The stated rate of interest on a loan is the:

nominal interest rate

Economic variables that are calculated in current year prices are referred to as __________ variables, while variables that have been corrected to account for the effects of inflation are __________ variables.

nominal; real

Many economists believe the CPI __________ inflation because it fails to consider quality improvements in products.

overstates

Macroeconomics is concerned with all of the following except:

political party affiliation; concerns standard of living, unemployment rates and inflation rates

If the consumer price index was 73 in 1979 and 225 in 2011, then prices in 2011 were on average:

three times as high as 1979