Question 1

What do economists at Industry Canada do?

Accepted Answer

A) prepare the federal budget 
B) write government regulations 
C) help design and enforce Canada's antimonopoly laws 
D) write the annual Economic Report 
A) prepare the federal budget 
B) write government regulations 
C) help design and enforce Canada's antimonopoly laws 
D) write the annual Economic Report

Question 2

Which of the following would be considered a topic of study in macroeconomics?

Accepted Answer

A) the impact of agricultural price support programs in the cotton industry 
B) the effect on U.S. steel producers of an import quota imposed on foreign steel 
C) the effect of an increase in the price of imported oil on the U.S. inflation rate 
D) the effect of an increase in the price of imported coffee beans on the U.S. coffee industry 
A) the impact of agricultural price support programs in the cotton industry 
B) the effect on U.S. steel producers of an import quota imposed on foreign steel 
C) the effect of an increase in the price of imported oil on the U.S. inflation rate 
D) the effect of an increase in the price of imported coffee beans on the U.S. coffee industry

Question 3

What do the two loops in the circular-flow diagram represent?

Accepted Answer

A) the flow of goods and the flow of services 
B) the flow of dollars and the flow of financial assets 
C) the flow of inputs and outputs and the flow of dollars 
D) the flow of capital goods and the flow of consumer goods 
A) the flow of goods and the flow of services 
B) the flow of dollars and the flow of financial assets 
C) the flow of inputs and outputs and the flow of dollars 
D) the flow of capital goods and the flow of consumer goods

Question 4

What do economists at Foreign Affairs Canada and International Trade Canada do?

Accepted Answer

A) help negotiate trade agreements with other countries 
B) offer advice on overseas economic development projects 
C) do not usually work together 
D) are concerned usually with the workings of labour markets 
A) help negotiate trade agreements with other countries 
B) offer advice on overseas economic development projects 
C) do not usually work together 
D) are concerned usually with the workings of labour markets

Question 5

Identify each of the following topics as being part of microeconomics or macroeconomics:
a.the impact of a change in consumer income on the purchase of luxury automobiles
b.the effect of a change in the price of Coke on the purchase of Pepsi
c.the impact of a war in the Middle East on the rate of inflation in Canada
d.factors influencing the rate of economic growth
e.factors influencing the demand for tractors
f. the impact of tax policy on national saving
g. the effect of pollution taxes on the Canadian copper industry
h. the degree of competition in the cable television industry
i. the effect of a balanced-budget amendment on economic stability
j. the impact of deregulation on the savings and loan industry

Accepted Answer

a, b, e, g, h, and j

Question 6

"Society would be better if the welfare system were abolished" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 7

Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 50 units of food and 30 machines. This year, it is producing 55 units of food and 33 machines. Which of the following would NOT explain the increase in output?

Accepted Answer

A) a reduction in unemployment 
B) an increase in the labour force 
C) an improvement in technology 
D) an increase in worker productivity 
A) a reduction in unemployment 
B) an increase in the labour force 
C) an improvement in technology 
D) an increase in worker productivity

Question 8

How is the slope of a straight line calculated?

Accepted Answer

A) rise divided by run 
B) run divided by rise 
C) the average of rise and run. 
D) rise plus run 
A) rise divided by run 
B) run divided by rise 
C) the average of rise and run. 
D) rise plus run

Question 9

Why do economists use graphs?

Accepted Answer

A) to find how variables are related in the real world 
B) to negate economic ideas that cannot be proved with equations or words 
C) to visually express ideas more clearly than might be the case if they are expressed with equations or words 
D) to make economic theory more relevant 
A) to find how variables are related in the real world 
B) to negate economic ideas that cannot be proved with equations or words 
C) to visually express ideas more clearly than might be the case if they are expressed with equations or words 
D) to make economic theory more relevant

Question 10

The country of Econoland produces two goods, textbooks and widgets. Last year it produced 200 textbooks and 500 widgets. This year it produced 250 textbooks and 600 widgets. Given no other information, which of the following could NOT explain the change?

Accepted Answer

A) Econoland experienced a reduction in unemployment. 
B) Econoland experienced an improvement in widget-making technology. 
C) Econoland acquired more resources. 
D) Econoland experienced a high level of emigration out of the country. 
A) Econoland experienced a reduction in unemployment. 
B) Econoland experienced an improvement in widget-making technology. 
C) Econoland acquired more resources. 
D) Econoland experienced a high level of emigration out of the country.

Question 11

Economic growth causes a production possibilities frontier to shift outward.

Accepted Answer

A) True 
 B)False

Question 12

How is the slope of a line calculated?

Accepted Answer

A) change in x/change in y 
B) change in y/change in x 
C) x/y 
D) x + y 
A) change in x/change in y 
B) change in y/change in x 
C) x/y 
D) x + y

Question 13

What do economists at the Bank of Canada do?

Accepted Answer

A) analyze data on labour markets 
B) help negotiate trade agreements 
C) analyze macroeconomic developments 
D) enforce antimonopoly laws 
A) analyze data on labour markets 
B) help negotiate trade agreements 
C) analyze macroeconomic developments 
D) enforce antimonopoly laws

Question 14

What happens in the markets for goods and services?

Accepted Answer

A) Households provide firms with savings for investment. 
B) Households provide firms with labour, land, and capital. 
C) Firms provide households with the output they produced. 
D) The government provides firms with inputs for the production process. 
A) Households provide firms with savings for investment. 
B) Households provide firms with labour, land, and capital. 
C) Firms provide households with the output they produced. 
D) The government provides firms with inputs for the production process.

Question 15

Which is the best statement about the way economists study the economy?

Accepted Answer

A) They study the past, but do not try to predict the future. 
B) They use a probabilistic approach based on correlations between economic events. 
C) They devise theories, collect data, and then analyze the data to test the theories. 
D) They use controlled experiments much the same way a biologist or physicist does. 
A) They study the past, but do not try to predict the future. 
B) They use a probabilistic approach based on correlations between economic events. 
C) They devise theories, collect data, and then analyze the data to test the theories. 
D) They use controlled experiments much the same way a biologist or physicist does.

Question 16

What are factors of production?

Accepted Answer

A) the mathematical calculations firms make to determine production 
B) weather and social and political conditions that affect production 
C) the physical relationships between economic inputs and outputs 
D) inputs into the production process 
A) the mathematical calculations firms make to determine production 
B) weather and social and political conditions that affect production 
C) the physical relationships between economic inputs and outputs 
D) inputs into the production process

Question 17

Figure 2-8  
-Refer to Figure 2-8. What is the opportunity cost of moving from point A to point B?

Accepted Answer

A) 8 bathtubs 
B) 20 barrels 
C) the difference between the 8 bathtubs you get and the 20 barrels you give up 
D) the difference between the 20 barrels you get and the 8 bathtubs you give up 
A) 8 bathtubs 
B) 20 barrels 
C) the difference between the 8 bathtubs you get and the 20 barrels you give up 
D) the difference between the 20 barrels you get and the 8 bathtubs you give up

Question 18

Figure 2-1  
-Refer to Figure 2-1. Which arrow shows the flow of goods and services?

Accepted Answer

A) arrow A 
B) arrow B 
C) arrow C 
D) arrow D 
A) arrow A 
B) arrow B 
C) arrow C 
D) arrow D

Question 19

If an economist develops a theory about international trade based on the assumption that there are only two countries and two goods, what is most likely?

Accepted Answer

A) The theory can be useful only in situations involving two countries and two goods. 
B) It is a total waste of time, since the actual world has many countries trading many goods. 
C) The theory can be useful in helping economists understand the complex world of international trade involving many countries and many goods. 
D) The theory can be useful in the classroom, but has no use in the real world. 
A) The theory can be useful only in situations involving two countries and two goods. 
B) It is a total waste of time, since the actual world has many countries trading many goods. 
C) The theory can be useful in helping economists understand the complex world of international trade involving many countries and many goods. 
D) The theory can be useful in the classroom, but has no use in the real world.

Question 20

What will the slope of a fairly flat upward-sloping line be?

Accepted Answer

A) a small positive number 
B) a large positive number 
C) a small negative number 
D) a large negative number 
A) a small positive number 
B) a large positive number 
C) a small negative number 
D) a large negative number

What do economists at Industry Canada do?

Which of the following would be considered a topic of study in macroeconomics?

What do the two loops in the circular-flow diagram represent?

What do economists at Foreign Affairs Canada and International Trade Canada do?

"Society would be better if the welfare system were abolished" is a normative statement, not a positive statement.

How is the slope of a straight line calculated?

Why do economists use graphs?

The country of Econoland produces two goods, textbooks and widgets. Last year it produced 200 textbooks and 500 widgets. This year it produced 250 textbooks and 600 widgets. Given no other information, which of the following could NOT explain the change?

Economic growth causes a production possibilities frontier to shift outward.

How is the slope of a line calculated?

What do economists at the Bank of Canada do?

What happens in the markets for goods and services?

Which is the best statement about the way economists study the economy?

What are factors of production?

Figure 2-8 -Refer to Figure 2-8. What is the opportunity cost of moving from point A to point B?

Figure 2-1 -Refer to Figure 2-1. Which arrow shows the flow of goods and services?

If an economist develops a theory about international trade based on the assumption that there are only two countries and two goods, what is most likely?

What will the slope of a fairly flat upward-sloping line be?

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters

Exam 2: Thinking Like an Economist

What do economists at Industry Canada do?

Which of the following would be considered a topic of study in macroeconomics?

What do the two loops in the circular-flow diagram represent?

What do economists at Foreign Affairs Canada and International Trade Canada do?

"Society would be better if the welfare system were abolished" is a normative statement, not a positive statement.

How is the slope of a straight line calculated?

Why do economists use graphs?

The country of Econoland produces two goods, textbooks and widgets. Last year it produced 200 textbooks and 500 widgets. This year it produced 250 textbooks and 600 widgets. Given no other information, which of the following could NOT explain the change?

Economic growth causes a production possibilities frontier to shift outward.

How is the slope of a line calculated?

What do economists at the Bank of Canada do?

What happens in the markets for goods and services?

Which is the best statement about the way economists study the economy?

What are factors of production?

Figure 2-8 -Refer to Figure 2-8. What is the opportunity cost of moving from point A to point B?

Figure 2-1 -Refer to Figure 2-1. Which arrow shows the flow of goods and services?

If an economist develops a theory about international trade based on the assumption that there are only two countries and two goods, what is most likely?

What will the slope of a fairly flat upward-sloping line be?

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters