Question 1

If real GDP grows to $9.5 trillion in 2014 from $9 trillion in 2013, the growth rate for real GDP is ________.

Accepted Answer

A) 6 percent 
B) 10 percent 
C) 5 percent 
D) 0)5 percent 
A) 6 percent 
B) 10 percent 
C) 5 percent 
D) 0)5 percent

Question 2

If the CPI is 120 in 2002 and 180 in 2012, then between 2002 and 2012, prices have increased by ________.

Accepted Answer

A) 180 percent 
B) 80 percent 
C) 60 percent 
D) 50 percent 
A) 180 percent 
B) 80 percent 
C) 60 percent 
D) 50 percent

Question 3

If nominal GDP in 2013 is $10 trillion, and 2013 real GDP in 2002 prices is $9 trillion, the GDP deflator price index is ________.

Accepted Answer

A) 1 
B) 1)1 
C) 11 
D) 100 
A) 1 
B) 1)1 
C) 11 
D) 100

Question 4

To calculate the growth rate of a variable, you will ________.

Accepted Answer

A) calculate the percentage change from one time period to the next 
B) calculate the difference between the two variables 
C) add the ending value to the beginning value 
D) divide the increase by the number of time periods 
A) calculate the percentage change from one time period to the next 
B) calculate the difference between the two variables 
C) add the ending value to the beginning value 
D) divide the increase by the number of time periods

Question 5

Which of the following is most likely to result from a stronger Canadian dollar?

Accepted Answer

A) Canadian goods exported aboard will cost less in foreign countries, and so foreigners will buy more of them. 
B) Canadian goods exported aboard will cost more in foreign countries and so foreigners will buy more of them. 
C) Canadian goods exported abroad will cost more in foreign countries, and so foreigners will buy fewer of them. 
D) Canadians will purchase fewer foreign goods. 
A) Canadian goods exported aboard will cost less in foreign countries, and so foreigners will buy more of them. 
B) Canadian goods exported aboard will cost more in foreign countries and so foreigners will buy more of them. 
C) Canadian goods exported abroad will cost more in foreign countries, and so foreigners will buy fewer of them. 
D) Canadians will purchase fewer foreign goods.

Question 6

The fluctuation of interest rates ________.

Accepted Answer

A) never occurs because the central bank is involved in setting the rate 
B) is due to changes in stock prices 
C) cannot occur because there is only one interest rate 
D) impacts all Canadians 
A) never occurs because the central bank is involved in setting the rate 
B) is due to changes in stock prices 
C) cannot occur because there is only one interest rate 
D) impacts all Canadians

Question 7

What is measured by the Gross Domestic Product (GDP)? what is included and what is excluded in the calculation of GDP?

Accepted Answer

GDP is the most commonly used measure of

Question 8

A budget ________ occurs when government expenditures exceed tax revenues for a particular time period.

Accepted Answer

A) deficit 
B) surplus 
C) surge 
D) surfeit 
A) deficit 
B) surplus 
C) surge 
D) surfeit

Question 9

________ theory relates changes in the quantity of money to changes in aggregate economic activity and the price level.

Accepted Answer

A) Monetary 
B) Fiscal 
C) Financial 
D) Systemic 
A) Monetary 
B) Fiscal 
C) Financial 
D) Systemic

Question 10

When prices are measured in terms of fixed (base-year)prices they are called ________ prices.

Accepted Answer

A) nominal 
B) real 
C) inflated 
D) aggregate 
A) nominal 
B) real 
C) inflated 
D) aggregate

Question 11

Everything else held constant, a stronger Canadian dollar benefits ________ and hurts ________.

Accepted Answer

A) Canadian businesses; Canadian consumers 
B) Canadian businesses; foreign businesses 
C) Canadian consumers; Canadian businesses 
D) foreign businesses; Canadian consumers 
A) Canadian businesses; Canadian consumers 
B) Canadian businesses; foreign businesses 
C) Canadian consumers; Canadian businesses 
D) foreign businesses; Canadian consumers

Question 12

The delivery of financial services electronically is called ________.

Accepted Answer

A) e-business 
B) e-commerce 
C) e-finance 
D) e-possible 
A) e-business 
B) e-commerce 
C) e-finance 
D) e-possible

Question 13

Stock prices, as measured by the S&P/TSX Composite Index, ________.

Accepted Answer

A) have not changed much over time 
B) have risen smoothly over time 
C) have been extremely volatile over time 
D) have declined substantially since they peaked in the mid 1980s 
A) have not changed much over time 
B) have risen smoothly over time 
C) have been extremely volatile over time 
D) have declined substantially since they peaked in the mid 1980s

Question 14

Everything else held constant, a weaker Canadian dollar will likely hurt ________.

Accepted Answer

A) textile exporters in Quebec 
B) wheat farmers in Saskatchewan that sell domestically 
C) automobile manufacturers in Ontario that use domestically produced inputs 
D) furniture importers in British Columbia 
A) textile exporters in Quebec 
B) wheat farmers in Saskatchewan that sell domestically 
C) automobile manufacturers in Ontario that use domestically produced inputs 
D) furniture importers in British Columbia

Question 15

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

Accepted Answer

A) discourage; encourage 
B) discourage; discourage 
C) encourage; encourage 
D) encourage; discourage 
A) discourage; encourage 
B) discourage; discourage 
C) encourage; encourage 
D) encourage; discourage

Question 16

Sustained downward movements in the business cycle are referred to as ________.

Accepted Answer

A) inflation 
B) recessions 
C) economic recoveries 
D) expansions 
A) inflation 
B) recessions 
C) economic recoveries 
D) expansions

Question 17

Prior to all recessions, there has been a drop in ________.

Accepted Answer

A) inflation 
B) the money stock 
C) the rate of money growth 
D) interest rates 
A) inflation 
B) the money stock 
C) the rate of money growth 
D) interest rates

Question 18

What happens to economic growth and unemployment during a business cycle recession? What is the relationship between the money growth rate and a business cycle recession?

Accepted Answer

During a recession, output dec

Question 19

There is a ________ association between inflation and the growth rate of money ________.

Accepted Answer

A) positive; demand 
B) positive; supply 
C) negative; demand 
D) negative; supply 
A) positive; demand 
B) positive; supply 
C) negative; demand 
D) negative; supply

Question 20

The cost of borrowing is commonly referred to as the ________.

Accepted Answer

A) inflation rate 
B) exchange rate 
C) interest rate 
D) aggregate price level 
A) inflation rate 
B) exchange rate 
C) interest rate 
D) aggregate price level

Exam 1: Why Study Money, Banking, and Financial Markets

If real GDP grows to $9.5 trillion in 2014 from $9 trillion in 2013, the growth rate for real GDP is ________.

If the CPI is 120 in 2002 and 180 in 2012, then between 2002 and 2012, prices have increased by ________.

If nominal GDP in 2013 is $10 trillion, and 2013 real GDP in 2002 prices is $9 trillion, the GDP deflator price index is ________.

To calculate the growth rate of a variable, you will ________.

Which of the following is most likely to result from a stronger Canadian dollar?

The fluctuation of interest rates ________.

What is measured by the Gross Domestic Product (GDP)? what is included and what is excluded in the calculation of GDP?

A budget ________ occurs when government expenditures exceed tax revenues for a particular time period.

________ theory relates changes in the quantity of money to changes in aggregate economic activity and the price level.

When prices are measured in terms of fixed (base-year)prices they are called ________ prices.

Everything else held constant, a stronger Canadian dollar benefits ________ and hurts ________.

The delivery of financial services electronically is called ________.

Stock prices, as measured by the S&P/TSX Composite Index, ________.

Everything else held constant, a weaker Canadian dollar will likely hurt ________.

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

Sustained downward movements in the business cycle are referred to as ________.

Prior to all recessions, there has been a drop in ________.

What happens to economic growth and unemployment during a business cycle recession? What is the relationship between the money growth rate and a business cycle recession?

There is a ________ association between inflation and the growth rate of money ________.

The cost of borrowing is commonly referred to as the ________.

An Overview of the Financial System

What Is Money

Understanding Interest Rates

The Behaviour of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Banking and the Management of Financial Institutions

Risk Management With Financial Derivatives

Central Banks and the Bank of Canada

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, Inflation, and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Markets

The ISLM Model

Non-Bank Finance

Filters

Everything else held constant, a stronger Canadian dollar benefits and hurts .

High interest rates might purchasing a house or car but at the same time high interest rates might saving.

There is a association between inflation and the growth rate of money .