Question 1

Cyclical unemployment occurs in the recessionary phase of the business cycle.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following best describes the relationship between deflation and consumption?

Accepted Answer

A) Deflation is an increase in the price level that causes people to postpone their consumption because they expect higher prices for goods and services in the future. 
B) Deflation is a decrease in the price level that causes people to postpone their consumption because they expect lower prices for goods and services in the future. 
C) Deflation is an increase in the price level that causes people to consume immediately because they expect higher prices for goods and services in the future. 
D) Deflation is a decrease in the price level that causes people to consume immediately because they expect higher prices for goods and services in the future. 
A) Deflation is an increase in the price level that causes people to postpone their consumption because they expect higher prices for goods and services in the future. 
B) Deflation is a decrease in the price level that causes people to postpone their consumption because they expect lower prices for goods and services in the future. 
C) Deflation is an increase in the price level that causes people to consume immediately because they expect higher prices for goods and services in the future. 
D) Deflation is a decrease in the price level that causes people to consume immediately because they expect higher prices for goods and services in the future.

Question 3

Which of the following is required to construct a consumer price index?

Accepted Answer

A) The choice of a base year in which prices are defined as 100. 
B) The creation of a representative basket of goods and services. 
C) The determination of the inflation rate. 
D) The calculation of changes in the level of consumption spending. 
A) The choice of a base year in which prices are defined as 100. 
B) The creation of a representative basket of goods and services. 
C) The determination of the inflation rate. 
D) The calculation of changes in the level of consumption spending.

Question 4

What is the difference between the CPI and the GDP deflator?

Accepted Answer

A) the GDP deflator includes imports while the CPI excludes them. 
B) The CPI includes imports while the GDP deflator excludes them. 
C) the CPI includes investment while the GDP deflator excludes it. 
D) the CPI includes exports while the GDP deflator excludes them. 
A) the GDP deflator includes imports while the CPI excludes them. 
B) The CPI includes imports while the GDP deflator excludes them. 
C) the CPI includes investment while the GDP deflator excludes it. 
D) the CPI includes exports while the GDP deflator excludes them.

Question 5

What is the best definition of the basket of goods and services included in the consumer price index?

Accepted Answer

A) The consumer goods and services produced by Canadian firms. 
B) The consumption pattern of a typical Canadian family. 
C) The minimum acceptable consumption for a family of four as set by Stats Canada. 
D) The sum of all domestic consumer goods bought by Canadians each month. 
A) The consumer goods and services produced by Canadian firms. 
B) The consumption pattern of a typical Canadian family. 
C) The minimum acceptable consumption for a family of four as set by Stats Canada. 
D) The sum of all domestic consumer goods bought by Canadians each month.

Question 6

Cost-push inflation is caused by the total demand for goods and services exceeding the economy's capacity to produce those goods.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is correct?

Accepted Answer

A) If nominal income increases,then real income must also increase. 
B) If real income increases,then nominal income must also increase. 
C) Inflation reduces the purchasing power of the dollar but increases real income. 
D) If nominal income increases,then real income may either increase or decrease. 
E) Inflation increases the purchasing power of the dollar but reduces real income. 
A) If nominal income increases,then real income must also increase. 
B) If real income increases,then nominal income must also increase. 
C) Inflation reduces the purchasing power of the dollar but increases real income. 
D) If nominal income increases,then real income may either increase or decrease. 
E) Inflation increases the purchasing power of the dollar but reduces real income.

Question 8

Which of the following best explains the relationship between the unemployment rate and discouraged workers?

Accepted Answer

A) Discouraged workers are not counted in the labour force and this causes the unemployment rate to increase. 
B) Discouraged workers are not counted in the labour force and this causes the unemployment rate to decrease. 
C) Discouraged workers are counted in the labour force and this causes the unemployment rate to increase. 
D) Discouraged workers are counted in the labour force and this causes the unemployment rate to decrease. 
A) Discouraged workers are not counted in the labour force and this causes the unemployment rate to increase. 
B) Discouraged workers are not counted in the labour force and this causes the unemployment rate to decrease. 
C) Discouraged workers are counted in the labour force and this causes the unemployment rate to increase. 
D) Discouraged workers are counted in the labour force and this causes the unemployment rate to decrease.

Question 9

What is one reason that the natural rate of unemployment has increased over the last three decades?

Accepted Answer

A) A larger number of male workers have entered the labour force. 
B) Longer job-search time by more affluent job seekers. 
C) Female participation rates have been declining over the past two decades. 
D) A reduction in employment insurance legislation. 
A) A larger number of male workers have entered the labour force. 
B) Longer job-search time by more affluent job seekers. 
C) Female participation rates have been declining over the past two decades. 
D) A reduction in employment insurance legislation.

Question 10

Suppose the unemployment rate is 7%,the natural rate of unemployment is 5%,and actual GDP is $400 million.According to Okun's Law,what is potential GDP?

Accepted Answer

A) $380 million 
B) $400 million 
C) $408 million 
D) $420 million 
E) $427 million 
A) $380 million 
B) $400 million 
C) $408 million 
D) $420 million 
E) $427 million

Question 11

All of the following statements,except one,are correct concerning unanticipated increases in inflation.Which is the exception?

Accepted Answer

A) It redistributes wealth and income in unpredictable ways. 
B) It increases the real value of savings. 
C) It decreases the purchasing power of money. 
D) It benefits debtors at the expense of creditors. 
E) It affects some individuals much more than others. 
A) It redistributes wealth and income in unpredictable ways. 
B) It increases the real value of savings. 
C) It decreases the purchasing power of money. 
D) It benefits debtors at the expense of creditors. 
E) It affects some individuals much more than others.

Question 12

Suppose nominal GDP for an economy rose from $125 billion in 2016 to $175 billion in 2017 and that the inflation rate over the same period was 5 percent.
-Refer to the information above to answer this question.By what percentage did nominal GDP increase between 2016 and 2017?

Accepted Answer

A) 10% 
B) 20% 
C) 30% 
D) 40% 
E) 50% 
A) 10% 
B) 20% 
C) 30% 
D) 40% 
E) 50%

Question 13

Distinguish between the CPI and the GDP deflator

Accepted Answer

CPI is a price index where the chosen ba

Question 14

The natural rate of unemployment is the unemployment rate at full employment.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a variation of cost-push inflation?

Accepted Answer

A) Import-push inflation. 
B) Demand-deficient inflation. 
C) Galloping inflation. 
D) National inflation. 
A) Import-push inflation. 
B) Demand-deficient inflation. 
C) Galloping inflation. 
D) National inflation.

Question 16

Which of the following could cause cost-push inflation?

Accepted Answer

A) The upward pressure by unions on wages. 
B) High interest rates demanded by lenders. 
C) Aggregate expenditures exceeding the economy's capacity to produce. 
D) Attempts by firms to increase productivity. 
E) The increased demand for imported goods. 
A) The upward pressure by unions on wages. 
B) High interest rates demanded by lenders. 
C) Aggregate expenditures exceeding the economy's capacity to produce. 
D) Attempts by firms to increase productivity. 
E) The increased demand for imported goods.

Question 17

What is meant by the participation rate?

Accepted Answer

A) The percentage of the population who are in the labour force. 
B) The percentage of the working age population who are in the labour force. 
C) The percentage of the population who are in the working age population. 
D) The percentage of the labour force who are employed. 
A) The percentage of the population who are in the labour force. 
B) The percentage of the working age population who are in the labour force. 
C) The percentage of the population who are in the working age population. 
D) The percentage of the labour force who are employed.

Question 18

What is meant by frictional unemployment?

Accepted Answer

A) Unemployment that is caused by the fact that it takes time for people to find their first job or to move between jobs. 
B) Unemployment which results from structural changes in an economy's industries. 
C) Unemployment that occurs as a result of the recessionary phase of the business cycle. 
D) Unemployment that occurs because people do not think that there are any jobs available. 
A) Unemployment that is caused by the fact that it takes time for people to find their first job or to move between jobs. 
B) Unemployment which results from structural changes in an economy's industries. 
C) Unemployment that occurs as a result of the recessionary phase of the business cycle. 
D) Unemployment that occurs because people do not think that there are any jobs available.

Question 19

Suppose real GDP increased 1% from Year 1 to Year 2 and the GDP deflator increased 2% for the same period of time.What is the percentage change for nominal GDP for the same period?

Accepted Answer

The answer of Suppose real GDP increased 1% from Year...

Question 20

What is inflation's effect on income?

Accepted Answer

A) It affects the distribution of income but not the total size of income. 
B) It does not affect the distribution of income but does affect the total size of income. 
C) It affects both the distribution and the total size of income. 
D) It affects neither the distribution nor the total size of income. 
A) It affects the distribution of income but not the total size of income. 
B) It does not affect the distribution of income but does affect the total size of income. 
C) It affects both the distribution and the total size of income. 
D) It affects neither the distribution nor the total size of income.

Cyclical unemployment occurs in the recessionary phase of the business cycle.

Which of the following best describes the relationship between deflation and consumption?

Which of the following is required to construct a consumer price index?

What is the difference between the CPI and the GDP deflator?

What is the best definition of the basket of goods and services included in the consumer price index?

Cost-push inflation is caused by the total demand for goods and services exceeding the economy's capacity to produce those goods.

Which of the following is correct?

Which of the following best explains the relationship between the unemployment rate and discouraged workers?

What is one reason that the natural rate of unemployment has increased over the last three decades?

Suppose the unemployment rate is 7%,the natural rate of unemployment is 5%,and actual GDP is $400 million.According to Okun's Law,what is potential GDP?

All of the following statements,except one,are correct concerning unanticipated increases in inflation.Which is the exception?

Suppose nominal GDP for an economy rose from $125 billion in 2016 to $175 billion in 2017 and that the inflation rate over the same period was 5 percent. -Refer to the information above to answer this question.By what percentage did nominal GDP increase between 2016 and 2017?

Distinguish between the CPI and the GDP deflator

The natural rate of unemployment is the unemployment rate at full employment.

Which of the following is a variation of cost-push inflation?

Which of the following could cause cost-push inflation?

What is meant by the participation rate?

What is meant by frictional unemployment?

Suppose real GDP increased 1% from Year 1 to Year 2 and the GDP deflator increased 2% for the same period of time.What is the percentage change for nominal GDP for the same period?

What is inflation's effect on income?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters

Exam 4: Measuring the Economy 2: Unemployment and Inflation

Cyclical unemployment occurs in the recessionary phase of the business cycle.

Which of the following best describes the relationship between deflation and consumption?

Which of the following is required to construct a consumer price index?

What is the difference between the CPI and the GDP deflator?

What is the best definition of the basket of goods and services included in the consumer price index?

Cost-push inflation is caused by the total demand for goods and services exceeding the economy's capacity to produce those goods.

Which of the following is correct?

Which of the following best explains the relationship between the unemployment rate and discouraged workers?

What is one reason that the natural rate of unemployment has increased over the last three decades?

Suppose the unemployment rate is 7%,the natural rate of unemployment is 5%,and actual GDP is $400 million.According to Okun's Law,what is potential GDP?

All of the following statements,except one,are correct concerning unanticipated increases in inflation.Which is the exception?

Suppose nominal GDP for an economy rose from $125 billion in 2016 to $175 billion in 2017 and that the inflation rate over the same period was 5 percent. -Refer to the information above to answer this question.By what percentage did nominal GDP increase between 2016 and 2017?

Distinguish between the CPI and the GDP deflator

The natural rate of unemployment is the unemployment rate at full employment.

Which of the following is a variation of cost-push inflation?

Which of the following could cause cost-push inflation?

What is meant by the participation rate?

What is meant by frictional unemployment?

Suppose real GDP increased 1% from Year 1 to Year 2 and the GDP deflator increased 2% for the same period of time.What is the percentage change for nominal GDP for the same period?

What is inflation's effect on income?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters