Question 1

Table 6.2  
-Refer to Table 6.2.Using the table above, what is the approximate growth rate of real GDP from 2013 to 2014?

Accepted Answer

A) -2.5% 
B) -1% 
C) 1% 
D) 2.5% 
E) 3.4% 
A) -2.5% 
B) -1% 
C) 1% 
D) 2.5% 
E) 3.4%

Question 2

The budget deficit is defined as

Accepted Answer

A) T - (G + TR), and this is negative. 
B) T - (G + TR), and this is positive. 
C) T + (G - TR), and this is negative. 
D) T + (G + TR), and this is negative. 
E) T + (G × TR), and this is positive. 
A) T - (G + TR), and this is negative. 
B) T - (G + TR), and this is positive. 
C) T + (G - TR), and this is negative. 
D) T + (G + TR), and this is negative. 
E) T + (G × TR), and this is positive.

Question 3

Since 1980,

Accepted Answer

A) the Canadian economy has spent more time in expansion than in recession. 
B) the Canadian economy has spent more in time in recession than expansion. 
C) the Canadian economy has spent equal time in recession and expansion. 
D) the Canadian economy has experienced almost no economic growth. 
E) the Canadian economy has experienced one long depression. 
A) the Canadian economy has spent more time in expansion than in recession. 
B) the Canadian economy has spent more in time in recession than expansion. 
C) the Canadian economy has spent equal time in recession and expansion. 
D) the Canadian economy has experienced almost no economic growth. 
E) the Canadian economy has experienced one long depression.

Question 4

What is investment in a closed economy if you have the following economic data? Y = $10 trillion
C = $5 trillion
TR = $2 trillion
G = $2 trillion

Accepted Answer

A) $2 trillion 
B) $3 trillion 
C) $5 trillion 
D) $7 trillion 
E) cannot be determined without information on taxes (T) 
A) $2 trillion 
B) $3 trillion 
C) $5 trillion 
D) $7 trillion 
E) cannot be determined without information on taxes (T)

Question 5

In a closed economy, public saving is equal to which of the following? (Y = GDP,   ,   , T = Taxes, and TR = Transfers)

Accepted Answer

A) Y - C - T 
B) Y - G - T 
C) T - G - TR 
D) Y - C - T + TR 
E) C + I + G 
A) Y - C - T 
B) Y - G - T 
C) T - G - TR 
D) Y - C - T + TR 
E) C + I + G

Question 6

During the expansion phase of the business cycle, which of the following eventually increases?

Accepted Answer

A) production 
B) employment 
C) income 
D) prices 
E) all of the above 
A) production 
B) employment 
C) income 
D) prices 
E) all of the above

Question 7

When potential GDP increases, is it necessarily the case that real GDP increases as well? Explain.

Accepted Answer

An increase in potential GDP is a result

Question 8

Potential GDP is defined as

Accepted Answer

A) the maximum GDP that the economy can produce. 
B) the amount of GDP produced if there is no frictional unemployment. 
C) the level of GDP attained when all firms are producing at capacity. 
D) the amount of GDP produced if there is no structural unemployment. 
E) the lowest level of GDP at which a country can feed its people. 
A) the maximum GDP that the economy can produce. 
B) the amount of GDP produced if there is no frictional unemployment. 
C) the level of GDP attained when all firms are producing at capacity. 
D) the amount of GDP produced if there is no structural unemployment. 
E) the lowest level of GDP at which a country can feed its people.

Question 9

Inflation tends to ________ during the expansion phase of the business cycle and ________ during the recession phase of the business cycle.

Accepted Answer

A) increase; decrease 
B) decrease; increase 
C) decrease; decrease further 
D) increase; increase further 
E) decrease; remain constant 
A) increase; decrease 
B) decrease; increase 
C) decrease; decrease further 
D) increase; increase further 
E) decrease; remain constant

Question 10

According to the "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?

Accepted Answer

A) less than 1 year 
B) 5 years 
C) 14 years 
D) 35 years 
E) 70 years 
A) less than 1 year 
B) 5 years 
C) 14 years 
D) 35 years 
E) 70 years

Question 11

Which of the following is most liquid?

Accepted Answer

A) a mutual fund share 
B) a government bond 
C) a corporate bond 
D) a five dollar bill 
E) a Piacso painting 
A) a mutual fund share 
B) a government bond 
C) a corporate bond 
D) a five dollar bill 
E) a Piacso painting

Question 12

A country with no trade and no borrowing and lending relationships with other countries is known as a(n)

Accepted Answer

A) planned economy. 
B) market economy. 
C) open economy. 
D) closed economy. 
E) a stable economy. 
A) planned economy. 
B) market economy. 
C) open economy. 
D) closed economy. 
E) a stable economy.

Question 13

Which of the following explains why the unemployment rate tends to rise as a recession ends?

Accepted Answer

A) Discouraged workers begin to search for jobs. 
B) The federal government uses a different definition of "unemployed" during recession. 
C) Employment insurance tends to be more generous during recessions. 
D) The birth rate tends to rise during recessions. 
E) Firms reducing hiring as recessions come to an end. 
A) Discouraged workers begin to search for jobs. 
B) The federal government uses a different definition of "unemployed" during recession. 
C) Employment insurance tends to be more generous during recessions. 
D) The birth rate tends to rise during recessions. 
E) Firms reducing hiring as recessions come to an end.

Question 14

If technological change increases the profitability of new investments for firms, then the ________ curve for loanable funds will shift to the ________.

Accepted Answer

A) supply: right 
B) supply; left 
C) demand; right 
D) demand; left 
A) supply: right 
B) supply; left 
C) demand; right 
D) demand; left

Question 15

A financial intermediary's main function is to match ________ with excess funds to ________ with shortages of funds.

Accepted Answer

A) savers; borrowers 
B) borrowers; savers 
C) governments; households 
D) firms; insurance companies 
E) lenders; government 
A) savers; borrowers 
B) borrowers; savers 
C) governments; households 
D) firms; insurance companies 
E) lenders; government

Question 16

As the economy nears the end of an expansion, which of the following do we typically see?

Accepted Answer

A) rising firm profits 
B) rising levels of firm investment 
C) rising interest rates 
D) falling wages relative to output prices 
E) falling prices 
A) rising firm profits 
B) rising levels of firm investment 
C) rising interest rates 
D) falling wages relative to output prices 
E) falling prices

Question 17

During the expansion phase of the business cycle,

Accepted Answer

A) production increases. 
B) employment decreases. 
C) income decreases. 
D) unemployment increases. 
E) the price level falls. 
A) production increases. 
B) employment decreases. 
C) income decreases. 
D) unemployment increases. 
E) the price level falls.

Question 18

In Canada, since the 1970s, expansions are more common than recessions.

Accepted Answer

A) True 
 B)False

Question 19

During an expansion, how do inflation and unemployment typically change?

Accepted Answer

A) Inflation and unemployment both rise. 
B) Inflation and unemployment both fall. 
C) Inflation falls and unemployment rises. 
D) Inflation rises and unemployment falls. 
A) Inflation and unemployment both rise. 
B) Inflation and unemployment both fall. 
C) Inflation falls and unemployment rises. 
D) Inflation rises and unemployment falls.

Question 20

When the government runs a deficit, which of the following is true?

Accepted Answer

A) T > TR - G 
B) G > T + TR 
C) G > TR - T 
D) T  Y - T + TR 
A) T > TR - G 
B) G > T + TR 
C) G > TR - T 
D) T  Y - T + TR

Table 6.2 -Refer to Table 6.2.Using the table above, what is the approximate growth rate of real GDP from 2013 to 2014?

The budget deficit is defined as

Since 1980,

What is investment in a closed economy if you have the following economic data? Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion

In a closed economy, public saving is equal to which of the following? (Y = GDP, , , T = Taxes, and TR = Transfers)

During the expansion phase of the business cycle, which of the following eventually increases?

When potential GDP increases, is it necessarily the case that real GDP increases as well? Explain.

Potential GDP is defined as

Inflation tends to during the expansion phase of the business cycle and during the recession phase of the business cycle.

According to the "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?

Which of the following is most liquid?

A country with no trade and no borrowing and lending relationships with other countries is known as a(n)

Which of the following explains why the unemployment rate tends to rise as a recession ends?

If technological change increases the profitability of new investments for firms, then the curve for loanable funds will shift to the .

A financial intermediary's main function is to match with excess funds to with shortages of funds.

As the economy nears the end of an expansion, which of the following do we typically see?

During the expansion phase of the business cycle,

In Canada, since the 1970s, expansions are more common than recessions.

During an expansion, how do inflation and unemployment typically change?

When the government runs a deficit, which of the following is true?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

GDP: Measuring Total Production and Income

Unemployment and Inflation

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 6: Economic Growth, The Financial System, and Business Cycles

Table 6.2 -Refer to Table 6.2.Using the table above, what is the approximate growth rate of real GDP from 2013 to 2014?

The budget deficit is defined as

Since 1980,

What is investment in a closed economy if you have the following economic data? Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion

In a closed economy, public saving is equal to which of the following? (Y = GDP, , , T = Taxes, and TR = Transfers)

During the expansion phase of the business cycle, which of the following eventually increases?

When potential GDP increases, is it necessarily the case that real GDP increases as well? Explain.

Potential GDP is defined as

Inflation tends to ________ during the expansion phase of the business cycle and ________ during the recession phase of the business cycle.

According to the "Rule of 70," how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?

Which of the following is most liquid?

A country with no trade and no borrowing and lending relationships with other countries is known as a(n)

Which of the following explains why the unemployment rate tends to rise as a recession ends?

If technological change increases the profitability of new investments for firms, then the ________ curve for loanable funds will shift to the ________.

A financial intermediary's main function is to match ________ with excess funds to ________ with shortages of funds.

As the economy nears the end of an expansion, which of the following do we typically see?

During the expansion phase of the business cycle,

In Canada, since the 1970s, expansions are more common than recessions.

During an expansion, how do inflation and unemployment typically change?

When the government runs a deficit, which of the following is true?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

GDP: Measuring Total Production and Income

Unemployment and Inflation

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Inflation tends to during the expansion phase of the business cycle and during the recession phase of the business cycle.

If technological change increases the profitability of new investments for firms, then the curve for loanable funds will shift to the .

A financial intermediary's main function is to match with excess funds to with shortages of funds.