Canadian Economy Practice Questions
Course Introduction
This course offers a comprehensive overview of the Canadian economy, examining its structure, performance, and major sectors within both a historical and contemporary context. Topics include economic growth and development, natural resources, trade and international relations, labor markets, fiscal and monetary policy, and the impact of globalization. Special attention is given to regional disparities, the role of government, and the economic challenges and opportunities facing Canada in a rapidly changing world. The course aims to equip students with a critical understanding of the factors shaping Canadas economic landscape and their implications for future policy and development.
Recommended Textbook
Principles of Macroeconomics 4th Canadian Edition by Robert H. Frank
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16 Chapters
2776 Verified Questions
2776 Flashcards
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Page 2
Chapter 1: Measuring Macroeconomic Performance: Output and Prices
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202 Verified Questions
202 Flashcards
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Sample Questions
Q1) The total benefit of a 3 GHz computer is A) $400.
B) $500.
C) $800.
D) $1,900.
E) $2,200.
Answer: D
Q2) The average benefit of 3 units of activity is
A) $41.
B) $50.
C) $60.
D) $75.
E) $100.
Answer: C
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3
Chapter 2: Measuring Macroeconomic Performance:
Saving and Wealth
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139 Verified Questions
139 Flashcards
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Sample Questions
Q1) Bobby Jo's opportunity cost of an extra bale of hemp is __________ and Mary Lou's is __________.
A) 0.33 fewer jugs of moonshine;0.29 fewer jugs of moonshine
B) 3 fewer jugs of moonshine;3.5 fewer jugs of moonshine
C) 3 fewer jugs of moonshine;0.29 fewer jugs of moonshine
D) 0.33 fewer jugs of moonshine;3.5 fewer jugs of moonshine
E) 27 fewer jugs of moonshine;14 fewer jugs of moonshine
Answer: C
Q2) Jerry's production possibilities curve for goods W and Z is W = 20 - 2Z,where W is the quantity of good W produced and Z is the quantity of good Z produced.The combination of W and Z (11,5)is a(n)__________ point.
A) unattainable
B) inefficient
C) inefficient but attainable
D) efficient
E) efficient and unattainable
Answer: A
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Page 4
Chapter 3: Measuring Macroeconomic Performance:
Wages, Employment and the Labour Market
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176 Verified Questions
176 Flashcards
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Sample Questions
Q1) Which of the following would NOT shift the supply curve for Intel processors?
A) A decrease in the price of silicon wafers.
B) An increase in the demand for Intel processors.
C) An improvement in the technology used to make processors.
D) An increase in the wage rate paid to high-tech workers.
E) An earthquake centred in Silicon Valley.
Answer: B
Q2) The supply curve for any good is an upward-sloping function of A) buyers' incomes.
B) sellers' profit margins.
C) its own price.
D) its price and its cost of production.
E) its price as well as buyers' incomes and tastes.
Answer: C
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Chapter 4: Short-Term Economic Fluctuations
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131 Flashcards
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Sample Questions
Q1) A particularly strong expansion is called a(n)
A) output excess.
B) boom.
C) growth recession.
D) bonanza.
E) production surplus.
Q2) Aggregation means the
A) adding up of individual economic variables to obtain economy-wide totals.
B) participation in national economic policy discussions.
C) worsening of an economic situation.
D) enhancement of the power and wealth of a nation.
E) practice of excluding non-economic costs from economic magnitudes.
Q3) A government is running a budget surplus if
A) government revenue exceeds government spending.
B) government revenue is less than government spending.
C) exports exceed imports.
D) imports exceed exports.
E) government revenue is less than government spending,and imports exceed exports.
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6
Chapter 5: Spending and Output in the Short Run
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207 Verified Questions
207 Flashcards
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Sample Questions
Q1) Real GDP per capita is positively associated with all of the following EXCEPT
A) more and better goods and services.
B) better health and life expectancies.
C) better education.
D) higher net exports.
E) a higher standard of living.
Q2) The government purchases component of GDP includes
A) purchases of final goods and services.
B) interest payments on government debt.
C) transfer payments.
D) pensions paid to government workers.
E) payments made to social security recipients.
Q3) A measure of the price level of the goods and services included in GDP is
A) the GDP deflator.
B) the CPI.
C) nominal GDP.
D) the GDP multiplier.
E) real GDP.
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7
Chapter 6: Fiscal Policy
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191 Flashcards
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Sample Questions
Q1) A relative price is
A) the rate of inflation.
B) a measure of overall prices at a particular point in time.
C) the percentage change in a price index such as the consumer price index.
D) the price of a specific good in comparison to the prices of other goods and services.
E) the aggregate change in prices over a year.
Q2) Suppose the value of the consumer price index (CPI)is 110 in year 1,116 in year 2,and 127 in year 3.Assume also that the price of computers increases by 3% between year 1 and year 2,and by another 3% between year 2 and year 3.The price level is increasing,the inflation rate is _______,and the relative price of computers is _________.
A) increasing;increasing
B) constant;increasing
C) constant;decreasing
D) increasing;decreasing
E) decreasing;decreasing
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Chapter 7: Money, Prices and the Reserve Bank
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163 Flashcards
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Sample Questions
Q1) In Macroland,potential output equals $100 trillion and the natural rate of unemployment is 4%.If the actual unemployment rate is 5%,then the output gap equals
A) - $2 trillion.
B) - $1 trillion.
C) $1 trillion.
D) $2 trillion.
E) $9 trillion.
Q2) In a recession,the cyclical rate of unemployment
A) is positive.
B) is zero.
C) is negative.
D) equals the natural rate of unemployment.
E) equals the sum of the frictional,structural,and seasonal unemployment rates.
Q3) From 1947 - 2010,the longest recession in Canada lasted _________ months.
A) 3
B) 6
C) 13
D) 19
E) 24
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Page 9
Chapter 8: The Reserve Bank and the Economy
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Sample Questions
Q1) In the basic Keynesian model where the marginal propensity to consume is 0.5,transfer payments must be _______,to close a recessionary gap resulting from a $1 billion decrease in autonomous consumption.
A) increased by $1 billion
B) decreased by $1 billion
C) increased by $2 billion
D) decreased by $2 billion E) increased by $0.5 billion
Q2) Employment insurance payments and social assistance payments,acting as automatic stabilizers,tend to reduce economic fluctuations because they automatically _________ during a recessionary gap and _________ during an expansionary gap. A) increase;increase
B) decrease;increase C) increase;decrease
D) decrease;do not change E) decrease;decrease
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Chapter 9: The Aggregate Demand - Aggregate Supply
Model
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124 Verified Questions
124 Flashcards
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Sample Questions
Q1) Given a required reserve-deposit ratio of 5% for all banks and assuming individuals hold no cash,total bank reserves of $400 billion can support deposits of
A) $400 billion.
B) $800 billion.
C) $4,000 billion.
D) $8,000 billion.
E) $9,000 billion.
Q2) An episode when depositors,spurred by news or rumours of the imminent bankruptcy of one or more banks,rush to withdraw their deposits from the banking system is called a(n)
A) open-market withdrawal.
B) open-market sale.
C) banking panic.
D) bank run.
E) reserve requirement crisis.
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Chapter 10: Macroeconomic Policy
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128 Flashcards
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Sample Questions
Q1) The Bank of Canada keeps the overnight rate within the operating band by standing ready to ________ funds at the lower limit of the band and to ________ funds at the upper limit.
A) lend;borrow
B) lend;lend
C) borrow;lend
D) borrow;borrow
E) give away;take
Q2) The fact that central banks are able to influence _________ implies that they can also influence _________ in the desired direction,because ________ is slow to adjust.
A) short-term market interest rates;long-term real interest rates;output
B) short-term market interest rates;short-term real interest rates;output
C) short-term market interest rates;short-term real interest rates;inflation
D) long-term market interest rates;long-term real interest rates;output
E) long-term market interest rates;long-term real interest rates;inflation
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Chapter
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134 Flashcards
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Sample Questions
Q1) When all prices rise in equal proportion,including the prices of goods and inputs,
A) one moves along the same vertical LRAS curve,from a lower to a higher point,and the real wage rate and the labour market remain unaffected.
B) the real wage rate and the labour market remain unaffected,and the real price of capital and the capital market remain unaffected.
C) one moves along the same vertical LRAS curve,from a lower to a higher point,the real wage rate and the labour market remain unaffected,and the real price of capital and the capital market remain unaffected.
D) the real wage rate and the labour market remain unaffected,the real price of capital and the capital market remain unaffected,and the real prices of other inputs and their markets remain unaffected.
E) one moves along the same vertical LRAS curve,from a lower to a higher point,the real wage rate and the labour market remain unaffected,the real price of capital and the capital market remain unaffected,and the real prices of other inputs and their markets remain unaffected.
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Chapter 12: The Production Function Approach to Understanding Growth
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211 Flashcards
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Sample Questions
Q1) The development of a new cost-saving technology would increase
A) autonomous consumption spending and,thus,shift the ADI curve to the right.
B) autonomous consumption spending and,thus,shift the ADI curve to the left.
C) autonomous investment spending and,thus,shift the ADI curve to the right.
D) autonomous investment spending and,thus,shift the ADI curve to the left.
E) net exports and government purchases and,thus,shift the ADI curve to the right.
Q2) A horizontal line showing the current rate of inflation,as determined by past expectations and pricing decisions,is called the
A) aggregate demand (ADI)curve.
B) long-run aggregate supply line.
C) inflation adjustment (IA)line.
D) expenditure line
E) short-run equilibrium output linE.
Q3) A combination of higher inflation and recession is called
A) deflation.
B) stagflation.
C) disinflation.
D) reflation.
E) infusion.
Page 14
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Chapter 13: Savings, Capital Formation and Comparative
Economic Growth
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203 Verified Questions
203 Flashcards
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Sample Questions
Q1) Refer to the diagram above.An increase in the supply of dollars will result in
A) an depreciation of the yen.
B) an appreciation of the dollar.
C) a depreciation of the dollar.
D) an increase in the exchange rate.
E) no change in the exchange ratE.
Q2) Refer to the diagram above.A decrease in the demand for dollars will result in
A) an appreciation of the dollar.
B) a depreciation of the yen.
C) a depreciation of the dollar.
D) an increase in the exchange rate.
E) no change in the exchange ratE.
Q3) For a given nominal exchange rate and foreign price level,a decrease in the domestic price level __________ the real exchange rate.
A) increases
B) decreases
C) may either increase or decrease
D) does not change
E) offsets any change in
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Chapter 14: International Trade
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175 Flashcards
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Sample Questions
Q1) In the long run,increases in average labour productivity are primarily responsible for increases in
A) living standards.
B) female labour force participation.
C) male labour force participation.
D) the proportion of the population retiring.
E) the proportion of the population employed.
Q2) The policy advice that developing countries should privatize,liberalize,balance budgets,and pursue low inflation was called the
A) Washington Consensus.
B) Millennium Development Goals.
C) Kyoto Protocol.
D) resource curse.
E) import substitution policy.
Q3) The key variable in determining changes in a country's standard of living is the A) interest rate.
B) inflation rate.
C) unemployment rate.
D) population growth rate.
E) long-run rate of economic growth.
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Chapter 15: Exchange Rates and the Open Economy
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) The demand for laser printers in a country is given by D = 10,000 - 2P,where P is the price of a laser printer.Supply by domestic producers is given by S = 2,000 + 8P.If the world price of a laser printer equals $1,000 and this economy is open to trade,then this country will
A) export 2,000 laser printers.
B) export 3,000 laser printers.
C) neither import nor export laser printers.
D) import 2,000 laser printers.
E) import 3,000 laser printers.
Q2) If the economy is initially suffering from a recessionary gap,the gap could be closed by
A) a decrease in government purchases.
B) an increase in taxes.
C) a decrease in transfers.
D) an increase in the interest rate.
E) an increase in net exports.
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17
Chapter 16: The Balance of Payments: Net Exports and International Capital Flows
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Sample Questions
Q1) Capital gains ______ peoples' wealth and therefore may _______ their saving out of income.
A) increase;increase
B) increase;decrease
C) decrease;increase
D) decrease;decrease
E) do not increase;not increase
Q2) If Alexandra deposits $1,000 from her paycheque into her chequing account and at the same time increases her credit card balance by $1,500,then her wealth
A) increases by $500.
B) increases by $1,000.
C) increases by $2,500.
D) decreases by $500.
E) decreases by $1,500.
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