Question 1

The CPI tends to overstate the true inflation rate because

Accepted Answer

A) we cannot know what the true inflation rate is. 
B) it fails to consider the effects of new products in the marketplace. 
C) the market basket actually selected is inappropriate. 
D) the market basket fails to weigh housing costs sufficiently. 
A) we cannot know what the true inflation rate is. 
B) it fails to consider the effects of new products in the marketplace. 
C) the market basket actually selected is inappropriate. 
D) the market basket fails to weigh housing costs sufficiently.

Question 2

Many economists would argue that some frictional unemployment

Accepted Answer

A) creates massive economic disruptions and should be eliminated as quickly as feasible. 
B) should be eliminated whatever the cost. 
C) no longer exists because increased unemployment benefits have generally solved this problem. 
D) cannot and probably should not be eliminated. 
A) creates massive economic disruptions and should be eliminated as quickly as feasible. 
B) should be eliminated whatever the cost. 
C) no longer exists because increased unemployment benefits have generally solved this problem. 
D) cannot and probably should not be eliminated.

Question 3

Which of the following statements is TRUE?

Accepted Answer

A) Expansions and contractions of the Canadian economy usually last the same length of time. 
B) Expansions vary greatly in length,but contractions last the same amount of time. 
C) The Canadian economy has neither expanded nor contracted since the end of World War II. 
D) Expansions and contractions of the Canadian economy vary greatly in length. 
A) Expansions and contractions of the Canadian economy usually last the same length of time. 
B) Expansions vary greatly in length,but contractions last the same amount of time. 
C) The Canadian economy has neither expanded nor contracted since the end of World War II. 
D) Expansions and contractions of the Canadian economy vary greatly in length.

Question 4

Describe in detail the types of unemployment,their consequences and provide an example of each as it applies in context.

Accepted Answer

1.Frictional - continuous flow of indivi

Question 5

The most general indication of economy-wide inflation is captured by the

Accepted Answer

A) Consumer Price Index. 
B) GDP deflator. 
C) Producer Price Index. 
D) Urban Wage Deflator. 
A) Consumer Price Index. 
B) GDP deflator. 
C) Producer Price Index. 
D) Urban Wage Deflator.

Question 6

An extremely severe recession is known as a

Accepted Answer

A) trough. 
B) peak. 
C) contraction. 
D) depression. 
A) trough. 
B) peak. 
C) contraction. 
D) depression.

Question 7

The CPI may be an inaccurate measure of changes in the price level because

Accepted Answer

A) consumers rarely switch to less expensive products when the price of a particular good increases. 
B) it is a changing quantity index. 
C) changes in product quality are not taken into account. 
D) the market basket of goods was determined arbitrarily by the government without conducting surveys of spending patterns. 
A) consumers rarely switch to less expensive products when the price of a particular good increases. 
B) it is a changing quantity index. 
C) changes in product quality are not taken into account. 
D) the market basket of goods was determined arbitrarily by the government without conducting surveys of spending patterns.

Question 8

The fact that a number of lifeguards lose their jobs at the end of each summer would be counted as

Accepted Answer

A) cyclical unemployment. 
B) frictional unemployment. 
C) seasonal unemployment. 
D) structural unemployment. 
A) cyclical unemployment. 
B) frictional unemployment. 
C) seasonal unemployment. 
D) structural unemployment.

Question 9

The CPI is an accurate measure of inflation for

Accepted Answer

A) farmers. 
B) an elderly couple recently retired to Vernon,British Columbia. 
C) Apple Computer. 
D) a family who consumes the market basket used to calculate the index. 
A) farmers. 
B) an elderly couple recently retired to Vernon,British Columbia. 
C) Apple Computer. 
D) a family who consumes the market basket used to calculate the index.

Question 10

"Unemployment rates are at an all time high for Canada,13% nationally".Given this statement,we are surely having economic problems.Do you agree or disagree.

Accepted Answer

Disagree.For starters,we do not know wha

Question 11

Which of the following measures gives the earliest warning of increasing inflation?

Accepted Answer

A) the Consumer Price Index 
B) the Producer Price Index 
C) the GDP deflator 
D) all of these should signal the same short-run inflation 
A) the Consumer Price Index 
B) the Producer Price Index 
C) the GDP deflator 
D) all of these should signal the same short-run inflation

Question 12

When unemployment exists in the economy,then the economy

Accepted Answer

A) will also have inflation. 
B) will be operating inside the production possibilities boundary. 
C) will have excess demand for products. 
D) will be at perfect equilibrium. 
A) will also have inflation. 
B) will be operating inside the production possibilities boundary. 
C) will have excess demand for products. 
D) will be at perfect equilibrium.

Question 13

A recession causes a decrease in the demand for housing,resulting in substantial layoffs in the construction industry.This is an example of

Accepted Answer

A) cyclical unemployment. 
B) frictional unemployment. 
C) seasonal unemployment. 
D) structural unemployment. 
A) cyclical unemployment. 
B) frictional unemployment. 
C) seasonal unemployment. 
D) structural unemployment.

Question 14

Inflation is best defined as

Accepted Answer

A) a price decrease. 
B) a relative price increase. 
C) an increase in the general price level. 
D) an increase in the price of a single necessity. 
A) a price decrease. 
B) a relative price increase. 
C) an increase in the general price level. 
D) an increase in the price of a single necessity.

Question 15

Increases in the duration of unemployment will

Accepted Answer

A) cause the unemployment rate to decrease. 
B) not affect the unemployment rate. 
C) decrease the number of discouraged workers. 
D) increase the unemployment rate. 
A) cause the unemployment rate to decrease. 
B) not affect the unemployment rate. 
C) decrease the number of discouraged workers. 
D) increase the unemployment rate.

Question 16

The real rate of interest is defined as

Accepted Answer

A) zero. 
B) the nominal rate of interest. 
C) the nominal rate of interest minus the anticipated inflation rate. 
D) the nominal rate of interest plus the anticipated inflation rate. 
A) zero. 
B) the nominal rate of interest. 
C) the nominal rate of interest minus the anticipated inflation rate. 
D) the nominal rate of interest plus the anticipated inflation rate.

Question 17

An increase in the duration of unemployment occurs when

Accepted Answer

A) business activity goes into a downturn. 
B) employment increases. 
C) the labour force shrinks. 
D) the labour force grows. 
A) business activity goes into a downturn. 
B) employment increases. 
C) the labour force shrinks. 
D) the labour force grows.

Question 18

When an economy experiences hidden unemployment,

Accepted Answer

A) its labour force increases,but the level of employment remains unchanged. 
B) the true rate of unemployment may exceed the official rate. 
C) the true rate of unemployment may be less than the official rate. 
D) the labour force may shrink and the unemployment rate may increase. 
A) its labour force increases,but the level of employment remains unchanged. 
B) the true rate of unemployment may exceed the official rate. 
C) the true rate of unemployment may be less than the official rate. 
D) the labour force may shrink and the unemployment rate may increase.

Question 19

Assume a ten percent decrease in the price of all goods in 1991;if the base year is 1990,then the price index in 1991 will be

Accepted Answer

A) 90. 
B) 110. 
C) 200. 
D) 1100. 
A) 90. 
B) 110. 
C) 200. 
D) 1100.

Question 20

When an individual is frictionally unemployed,the unemployment arises from

Accepted Answer

A) a short-term elimination of jobs because of a slowdown in business activity. 
B) imperfect labour market information which requires individuals to search for appropriate employment. 
C) the permanent elimination of jobs because of a change in the structure of the economy. 
D) a reduction in the overall demand for labour's skills. 
A) a short-term elimination of jobs because of a slowdown in business activity. 
B) imperfect labour market information which requires individuals to search for appropriate employment. 
C) the permanent elimination of jobs because of a change in the structure of the economy. 
D) a reduction in the overall demand for labour's skills.

The CPI tends to overstate the true inflation rate because

Many economists would argue that some frictional unemployment

Which of the following statements is TRUE?

Describe in detail the types of unemployment,their consequences and provide an example of each as it applies in context.

The most general indication of economy-wide inflation is captured by the

An extremely severe recession is known as a

The CPI may be an inaccurate measure of changes in the price level because

The fact that a number of lifeguards lose their jobs at the end of each summer would be counted as

The CPI is an accurate measure of inflation for

"Unemployment rates are at an all time high for Canada,13% nationally".Given this statement,we are surely having economic problems.Do you agree or disagree.

Which of the following measures gives the earliest warning of increasing inflation?

When unemployment exists in the economy,then the economy

A recession causes a decrease in the demand for housing,resulting in substantial layoffs in the construction industry.This is an example of

Inflation is best defined as

Increases in the duration of unemployment will

The real rate of interest is defined as

An increase in the duration of unemployment occurs when

When an economy experiences hidden unemployment,

Assume a ten percent decrease in the price of all goods in 1991;if the base year is 1990,then the price index in 1991 will be

When an individual is frictionally unemployed,the unemployment arises from

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 4: Introduction to Macroeconomics

The CPI tends to overstate the true inflation rate because

Many economists would argue that some frictional unemployment

Which of the following statements is TRUE?

Describe in detail the types of unemployment,their consequences and provide an example of each as it applies in context.

The most general indication of economy-wide inflation is captured by the

An extremely severe recession is known as a

The CPI may be an inaccurate measure of changes in the price level because

The fact that a number of lifeguards lose their jobs at the end of each summer would be counted as

The CPI is an accurate measure of inflation for

"Unemployment rates are at an all time high for Canada,13% nationally".Given this statement,we are surely having economic problems.Do you agree or disagree.

Which of the following measures gives the earliest warning of increasing inflation?

When unemployment exists in the economy,then the economy

A recession causes a decrease in the demand for housing,resulting in substantial layoffs in the construction industry.This is an example of

Inflation is best defined as

Increases in the duration of unemployment will

The real rate of interest is defined as

An increase in the duration of unemployment occurs when

When an economy experiences hidden unemployment,

Assume a ten percent decrease in the price of all goods in 1991;if the base year is 1990,then the price index in 1991 will be

When an individual is frictionally unemployed,the unemployment arises from

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters