Question 1

If the CPI was 100 in the base year and 96 in the following year,what was the inflation rate?

Accepted Answer

A) -4 percent 
B) 4 percent 
C) 96 percent 
D) 100 percent 
A) -4 percent 
B) 4 percent 
C) 96 percent 
D) 100 percent

Question 2

After looking for a job for more than eight months,Kyle has become frustrated and stopped looking.How do economists view Kyle?

Accepted Answer

A) as cyclically unemployed 
B) as unemployed 
C) as part of the labour force, but neither employed nor unemployed 
D) as a discouraged worker 
A) as cyclically unemployed 
B) as unemployed 
C) as part of the labour force, but neither employed nor unemployed 
D) as a discouraged worker

Question 3

What are the four main categories of unemployed workers? Provide a specific example of each.

Accepted Answer

There are four main categories

Question 4

Unanticipated deflation will benefit creditors at the expense of debtors.

Accepted Answer

A) True 
 B)False

Question 5

When does deflation exist in the economy?

Accepted Answer

A) whenever the economy experiences a contraction 
B) whenever the overall price level rises 
C) whenever the price of a good decreases 
D) whenever the overall price level falls 
A) whenever the economy experiences a contraction 
B) whenever the overall price level rises 
C) whenever the price of a good decreases 
D) whenever the overall price level falls

Question 6

When does cyclical unemployment arise?

Accepted Answer

A) when the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation's food supply 
B) when business activity in the macroeconomy declines 
C) when the business cycle enters an expansionary phase 
D) when labour unions strike for higher wages 
A) when the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation's food supply 
B) when business activity in the macroeconomy declines 
C) when the business cycle enters an expansionary phase 
D) when labour unions strike for higher wages

Question 7

Luke has lent his friend Mitch some money; however,he underestimated the rate of inflation when they agreed to a repayment and interest schedule.Mitch will benefit from the inflation.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following best describes unemployment in the business cycle?

Accepted Answer

A) It rises in booms and falls in recessions. 
B) It rises in peaks and falls in troughs. 
C) It rises in contractions and falls in expansions. 
D) It rises in expansions and falls in contractions. 
A) It rises in booms and falls in recessions. 
B) It rises in peaks and falls in troughs. 
C) It rises in contractions and falls in expansions. 
D) It rises in expansions and falls in contractions.

Question 9

What do economists consider a forestry worker who is out of work because of the temporarily low demand for wood products associated with a recession?

Accepted Answer

A) frictionally unemployed 
B) structurally unemployed 
C) cyclically unemployed 
D) underemployed 
A) frictionally unemployed 
B) structurally unemployed 
C) cyclically unemployed 
D) underemployed

Question 10

What percentage of the unemployed do job losers typically account for?

Accepted Answer

A) 10 to 20 percent 
B) 30 to 40 percent 
C) 50 to 60 percent 
D) 80 to 90 percent 
A) 10 to 20 percent 
B) 30 to 40 percent 
C) 50 to 60 percent 
D) 80 to 90 percent

Question 11

In 2010,which Canadian province had the highest levels of unemployment?

Accepted Answer

A) Ontario 
B) British Columbia 
C) Quebec 
D) Newfoundland 
A) Ontario 
B) British Columbia 
C) Quebec 
D) Newfoundland

Question 12

What is the most closely watched measure of inflation?

Accepted Answer

A) Statistics Canada Index 
B) Consumer Price Index 
C) Commerce Price Index 
D) Industrial Products Price Index 
A) Statistics Canada Index 
B) Consumer Price Index 
C) Commerce Price Index 
D) Industrial Products Price Index

Question 13

St.Somewhere has a working age population of 20 million.Of those,11 million are employed and 1 million are unemployed.What is the unemployment rate?

Accepted Answer

A) 4% 
B) 5% 
C) 6.3% 
D) 8.3% 
A) 4% 
B) 5% 
C) 6.3% 
D) 8.3%

Question 14

If the price index is 120 in 2001 and 126 in 2002,what is the inflation rate?

Accepted Answer

A) 5 percent 
B) 6 percent 
C) 20 percent 
D) 26 percent 
A) 5 percent 
B) 6 percent 
C) 20 percent 
D) 26 percent

Question 15

If the inflation rate is 6 percent,what is the real interest rate paid on a loan bearing 7 percent nominal interest per year?

Accepted Answer

A) 1 percent 
B) 6 percent 
C) 7 percent 
D) 13 percent 
A) 1 percent 
B) 6 percent 
C) 7 percent 
D) 13 percent

Question 16

Which of the following statements about the natural rate of unemployment is the most accurate?

Accepted Answer

A) It includes only cyclical unemployment. 
B) It is the sum of both frictional and structural unemployment. 
C) It is the sum of both cyclical and structural unemployment. 
D) It includes only frictional unemployment. 
A) It includes only cyclical unemployment. 
B) It is the sum of both frictional and structural unemployment. 
C) It is the sum of both cyclical and structural unemployment. 
D) It includes only frictional unemployment.

Question 17

How is economic growth measured?

Accepted Answer

A) by changes in the money supply 
B) by changes in real GDP 
C) by changes in the rate of unemployment 
D) by changes in nominal GDP 
A) by changes in the money supply 
B) by changes in real GDP 
C) by changes in the rate of unemployment 
D) by changes in nominal GDP

Question 18

Unanticipated inflation will benefit creditors at the expense of debtors.

Accepted Answer

A) True 
 B)False

Question 19

If the CPI equals 100 in year one (the base year)and equals 106 in year two,what can be concluded?

Accepted Answer

A) The rate of inflation from year one to year two equals +106 percent. 
B) The rate of inflation from year one to year two equals -6 percent. 
C) The rate of inflation from year one to year two equals +6 percent. 
D) National income has increased by 6 percent from year one to year two. 
A) The rate of inflation from year one to year two equals +106 percent. 
B) The rate of inflation from year one to year two equals -6 percent. 
C) The rate of inflation from year one to year two equals +6 percent. 
D) National income has increased by 6 percent from year one to year two.

Question 20

Kathryn chooses to go to university full-time rather than to work.How do economists view Kathryn?

Accepted Answer

A) as not part of the labour force 
B) as employed 
C) as part of the labour force and what economists call a discouraged worker 
D) as part of the labour force, but not actively seeking work 
A) as not part of the labour force 
B) as employed 
C) as part of the labour force and what economists call a discouraged worker 
D) as part of the labour force, but not actively seeking work

If the CPI was 100 in the base year and 96 in the following year,what was the inflation rate?

After looking for a job for more than eight months,Kyle has become frustrated and stopped looking.How do economists view Kyle?

What are the four main categories of unemployed workers? Provide a specific example of each.

Unanticipated deflation will benefit creditors at the expense of debtors.

When does deflation exist in the economy?

When does cyclical unemployment arise?

Luke has lent his friend Mitch some money; however,he underestimated the rate of inflation when they agreed to a repayment and interest schedule.Mitch will benefit from the inflation.

Which of the following best describes unemployment in the business cycle?

What do economists consider a forestry worker who is out of work because of the temporarily low demand for wood products associated with a recession?

What percentage of the unemployed do job losers typically account for?

In 2010,which Canadian province had the highest levels of unemployment?

What is the most closely watched measure of inflation?

St.Somewhere has a working age population of 20 million.Of those,11 million are employed and 1 million are unemployed.What is the unemployment rate?

If the price index is 120 in 2001 and 126 in 2002,what is the inflation rate?

If the inflation rate is 6 percent,what is the real interest rate paid on a loan bearing 7 percent nominal interest per year?

Which of the following statements about the natural rate of unemployment is the most accurate?

How is economic growth measured?

Unanticipated inflation will benefit creditors at the expense of debtors.

If the CPI equals 100 in year one (the base year)and equals 106 in year two,what can be concluded?

Kathryn chooses to go to university full-time rather than to work.How do economists view Kathryn?

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters

Exam 5: Introduction to the Macroeconomy

If the CPI was 100 in the base year and 96 in the following year,what was the inflation rate?

After looking for a job for more than eight months,Kyle has become frustrated and stopped looking.How do economists view Kyle?

What are the four main categories of unemployed workers? Provide a specific example of each.

Unanticipated deflation will benefit creditors at the expense of debtors.

When does deflation exist in the economy?

When does cyclical unemployment arise?

Luke has lent his friend Mitch some money; however,he underestimated the rate of inflation when they agreed to a repayment and interest schedule.Mitch will benefit from the inflation.

Which of the following best describes unemployment in the business cycle?

What do economists consider a forestry worker who is out of work because of the temporarily low demand for wood products associated with a recession?

What percentage of the unemployed do job losers typically account for?

In 2010,which Canadian province had the highest levels of unemployment?

What is the most closely watched measure of inflation?

St.Somewhere has a working age population of 20 million.Of those,11 million are employed and 1 million are unemployed.What is the unemployment rate?

If the price index is 120 in 2001 and 126 in 2002,what is the inflation rate?

If the inflation rate is 6 percent,what is the real interest rate paid on a loan bearing 7 percent nominal interest per year?

Which of the following statements about the natural rate of unemployment is the most accurate?

How is economic growth measured?

Unanticipated inflation will benefit creditors at the expense of debtors.

If the CPI equals 100 in year one (the base year)and equals 106 in year two,what can be concluded?

Kathryn chooses to go to university full-time rather than to work.How do economists view Kathryn?

The Role and Method of Economics

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters