Canadian Macroeconomic Analysis
Exam Answer Key
Course Introduction
Canadian Macroeconomic Analysis explores the fundamental principles and dynamics that drive the Canadian economy at the national level. The course covers topics such as economic growth, inflation, unemployment, fiscal policy, monetary policy, exchange rates, and international trade, all within the context of Canadas unique institutional framework and resource-based economy. Students will evaluate the performance of the Canadian economy using real-world data, examine the impact of government policy decisions, and analyze how external shocks and global economic trends influence Canadian macroeconomic stability and growth. Through case studies and empirical analysis, the course provides a comprehensive understanding of the economic issues and policy challenges facing Canada today.
Recommended Textbook
Macroeconomics 3rd Edition Canadian by Paul Krugman Robin Wells
Available Study Resources on Quizplus
19 Chapters
5325 Verified Questions
5325 Flashcards
Source URL: https://quizplus.com/study-set/3893
Page 2
Chapter 1: First Principles
Available Study Resources on Quizplus for this Chatper
198 Verified Questions
198 Flashcards
Source URL: https://quizplus.com/quiz/77536
Sample Questions
Q1) Which of the following policies is MOST likely to reduce traffic congestion in a large metropolitan area because people usually exploit opportunities to make themselves better off?
A) a limited number of free early-bird parking passes given only to those who arrive prior to 6 A.M.
B) a toll road that requires each car to pay a fee to enter the city center
C) an increase in the price of subway and bus fare to and from the city
D) asking citizens to carpool
Answer: B
Q2) Market failure occurs when the pursuit of self-interest leads to bad results for society.
A)True
B)False
Answer: True
Q3) The study of economics arises because of the necessity of choice,and the necessity of choice arises because of the fundamental problem of scarcity of resources.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Economic Models: Trade-Offs and Trade
Available Study Resources on Quizplus for this Chatper
296 Verified Questions
296 Flashcards
Source URL: https://quizplus.com/quiz/77526
Sample Questions
Q1) (Table: Comparative Advantage I)Use Table: Comparative Advantage I.The opportunity cost of producing one box of cell phones for Finland is _____ box(es)of herring.
A) 10
B) 0.5
C) 5
D) 0.1
Answer: C
Q2) (Table: Trade-off of Study Time and Leisure Time)Use Table: Trade-off of Study Time and Leisure Time.A student sleeps 8 hours per day and divides the remaining time between study time and leisure time.The table shows the combinations of study and leisure time that can be produced in the 16 waking hours of each day.If a student decides to consume one additional hour of leisure time,how many hours of study time must she give up?
A) 4
B) 0.25
C) 1
D) 16
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Supply and Demand
Available Study Resources on Quizplus for this Chatper
264 Verified Questions
264 Flashcards
Source URL: https://quizplus.com/quiz/77524
Sample Questions
Q1) It is certain that the equilibrium price will rise when the supply curve shifts to the _____ and the demand curve shifts to the _____.
A) right;right
B) right;left
C) left;left
D) left;right
Answer: D
Q2) A new wonder diet that results in a dramatic weight loss sweeps through Canada.The key to the diet is to eat large amounts of red meat (beef)but no poultry or carbohydrate-rich foods.As hundreds of thousands of Canadians switch to the new diet,we can expect a(n)_____ in the _____ poultry,leading to a shift to the _____ in the _____ curve for poultry and _____ poultry prices.
A) decrease;supply of;left;supply;higher
B) increase;supply of;right;supply;higher
C) decrease;demand for;right;demand;lower
D) decrease;demand for;left;demand;lower
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Price Controls and Quotas: Meddling With Markets
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/77523
Sample Questions
Q1) One of the ways rent control is inefficient is that it leads to:
A) higher-quality apartments.
B) high opportunity costs associated with wasted time searching for apartments.
C) markets that maximize total surplus.
D) the construction of more apartments.
Q2) (Table: Quantity Supplied and Quantity Demanded)Use Table: Quantity Supplied and Quantity Demanded.The government institutes a price floor,and as a result,too many resources are allocated for the production of the good.Given this,which dollar amount is a possible value of the price floor in this market?
A) $5
B) $10
C) $15
D) $20
Q3) A binding price floor is a _____ price set _____ the equilibrium price.
A) minimum;at B) maximum;below
C) minimum;above D) maximum;above
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: International Trade
Available Study Resources on Quizplus for this Chatper
258 Verified Questions
258 Flashcards
Source URL: https://quizplus.com/quiz/77522
Sample Questions
Q1) In a single year,Argentina can raise 100 tonnes of beef or produce 1 000 boxes of tulips.In the same growing season,Venezuela can raise 50 tonnes of beef or produce 750 boxes of tulips.When the two countries begin trading beef for tulips,we expect the total surplus from beef consumption and production to:
A) fall in Argentina.
B) rise in Argentina.
C) stay the same in Venezuela.
D) either rise or fall in Venezuela.
Q2) International trade based on comparative advantage allows a country to produce outside its production possibility frontier.
A)True
B)False
Q3) Import protections are often imposed because:
A) import protections increase total surplus,even though some groups are harmed.
B) groups representing import-competing industries are more cohesive than consumers.
C) benefits to producers outweigh the costs to the consumer.
D) the loss in consumer surplus is usually quite small.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Macroeconomics: the Big Picture
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/77521
Sample Questions
Q1) If the economy grew at 3% this year and average prices increased _____,people would be better off this year than the last year.
A) by 3%
B) faster than 3%
C) less than 3%
D) faster than 10%
Q2) Recessions tend to be _____,and expansions tend to be _____.
A) short;short
B) long;long
C) short;long
D) long;short
Q3) Which two types of policy are considered to be macroeconomic?
A) monetary and fiscal policy
B) monetary and regulation policy
C) fiscal and regulation policy
D) fiscal policy and price controls
Q4) The business cycle is the long-run alternation between downturns and upturns.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Gdp and the Cpi: Tracking the Macroeconomy
Available Study Resources on Quizplus for this Chatper
321 Verified Questions
321 Flashcards
Source URL: https://quizplus.com/quiz/77520
Sample Questions
Q1) (Figure 7-1: Circular-Flow Model)Use Figure 7-1: Circular-Flow Model.What is disposable income?
A) $0
B) $100
C) $400
D) $500
Q2) In Canada,investment spending accounts for approximately _____% of GDP.
A) 6
B) 16
C) 23
D) 33
Q3) Intermediate goods are NOT counted in GDP because:
A) doing so would result in double-counting.
B) these goods are not produced for the market.
C) these goods are produced in the underground economy.
D) these goods involve financial transactions.
Q4) GDP per capita measures the value of all intermediate goods and services produced in the economy.
A)True
B)False
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Unemployment and Inflation
Available Study Resources on Quizplus for this Chatper
332 Verified Questions
332 Flashcards
Source URL: https://quizplus.com/quiz/77519
Sample Questions
Q1) The labour force is the total:
A) number of people employed.
B) population.
C) number of people in the population of working age.
D) number of people who are employed or unemployed.
Q2) Frictional and structural unemployment are a part of the natural rate of unemployment.
A)True
B)False
Q3) (Figure: The Labour Market)Use Figure: The Labour Market.The level of employment at the equilibrium wage rate is:
A) 80 000.
B) 110 000
C) 100 000.
D) 90 000.
Q4) Unit-of-account costs refer to the:
A) increase in prices during inflation.
B) decrease in the value of money during inflation.
C) loss of the reliability of money as a relative unit of measurement.
D) increased cost of servicing bank accounts during inflation.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Long-Run Economic Growth
Available Study Resources on Quizplus for this Chatper
298 Verified Questions
298 Flashcards
Source URL: https://quizplus.com/quiz/77518
Sample Questions
Q1) Which factor is NOT necessary for convergence between two countries?
A) equal access to education
B) equal access to infrastructure
C) a common language between the two countries
D) similar levels of political stability
Q2) Growth accounting enables us to:
A) calculate how long it takes the economy to grow.
B) calculate the effects of technological progress on economic growth.
C) compare growth rates across countries.
D) better calculate real GDP per capita.
Q3) The purpose of the convergence hypothesis is to encourage trade between countries by limiting the amount of tariffs that can be imposed on traded goods.
A)True
B)False
Q4) Japan's economy:
A) had higher real GDP per capita than that of most European countries in 2010.
B) relies on high consumption to spur its economic growth.
C) grew but not as fast as Mexico's economy over the long run.
D) had the same real GDP per capita as Mexico in 1820.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Savings, Investment Spending, and the Financial System
Available Study Resources on Quizplus for this Chatper
385 Verified Questions
385 Flashcards
Source URL: https://quizplus.com/quiz/77535
Sample Questions
Q1) If a country has a trade surplus,we can conclude that it also has a:
A) budget surplus.
B) net capital outflow.
C) net capital inflow.
D) budget deficit.
Q2) You have an opportunity to pay $1 000 today and receive $1 200 a year from now.If the annual interest rate is 20%,the difference between the present value of the benefit and your investment is:
A) $440.
B) $200.
C) $166.
D) 0.
Q3) An illiquid asset can be quickly converted to cash with little or no loss of value.
A)True
B)False
Q4) Stocks are usually riskier than bonds but also typically earn a higher rate of return than do bonds.
A)True
B)False
Chapter 11: Income and Expenditure
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/77534
Sample Questions
Q1) If the marginal propensity to save is 0.3,the size of the multiplier is:
A) 3.3.
B) 2.3.
C) 1.3.
D) 0.7.
Q2) If the marginal propensity to save is 0.2,the multiplier will be 5.
A)True
B)False
Q3) In a simple,closed economy (no government or foreign sector),if disposable income increases by $500 and $450 is consumed,$50 is saved.
A)True
B)False
Q4) In a simple,closed economy (no government or foreign sector),any disposable income that is not consumed is saved.
A)True
B)False
Q5) People use wealth to smooth consumption over their life cycle.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Aggregate Demand and Aggregate Supply
Available Study Resources on Quizplus for this Chatper
345 Verified Questions
345 Flashcards
Source URL: https://quizplus.com/quiz/77533
Sample Questions
Q1) (Figure: Inflationary and Recessionary Gaps)Refer to Figure: Inflationary and Recessionary Gaps.If the economy is in short-run equilibrium at Y<sub>1</sub> in panel (b),to return to potential output at Y<sub>P</sub> policy makers should use:
A) contractionary stabilization policy.
B) expansionary stabilization policy.
C) policies to shift the SRAS to the left.
D) policies to shift the LRAS to the left.
Q2) The aggregate supply curve shows the relationship between the _____ and the quantity of aggregate output supplied.
A) price of oil
B) aggregate price level
C) price of money
D) level of employment
Q3) The aggregate demand curve shows a negative relationship between the price level and the quantity of aggregate output demanded.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
14
Chapter 13: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
346 Verified Questions
346 Flashcards
Source URL: https://quizplus.com/quiz/77532
Sample Questions
Q1) Suppose the federal government increases personal income tax rates to balance the budget.Automatic stabilizers will _____ the _____ effect of the _____ in aggregate demand.
A) increase;contractionary;decrease
B) decrease;contractionary;decrease
C) increase;expansionary;increase
D) decrease;expansionary;increase
Q2) (Figure: Fiscal Policy II)Refer to Figure: Fiscal Policy II.Suppose that this economy is in equilibrium at E<sub>1</sub>.If there is a decrease in taxes,_____ will shift to the _____,causing a(n)_____ in the price level and a(n)_____ in real GDP.
A) AD<sub>1</sub>;right;increase;increase
B) AD<sub>1</sub>;left;decrease;decrease
C) AD<sub>2</sub>;right;increase;increase
D) AD<sub>2</sub>;right;decrease;increase
Q3) A change in government transfers shifts the aggregate demand curve by more than a change in government spending for goods and services and has a larger effect on real GDP.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Money, Banking, and the Federal Reserve System
Available Study Resources on Quizplus for this Chatper
428 Verified Questions
428 Flashcards
Source URL: https://quizplus.com/quiz/77531
Sample Questions
Q1) Banks create money when they:
A) make loans.
B) take deposits.
C) hold excess reserves.
D) pay withdrawals to depositors.
Q2) Which factor would be classified as a tool of monetary policy used by the Bank of Canada?
I.tax rates
II.government purchases of goods and services
A) I only
B) II only
C) I and II
D) neither I nor II
Q3) Before World War I,private Canadian banks in this era were allowed to issue their own banknotes as long as they held a sufficient amount of gold to back their value.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Monetary Policy
Available Study Resources on Quizplus for this Chatper
340 Verified Questions
340 Flashcards
Source URL: https://quizplus.com/quiz/77530
Sample Questions
Q1) Long-term interest rates and short-term interest rates:
A) usually move in lockstep.
B) always move closely together.
C) don't always move closely together.
D) are independent of one another.
Q2) The fact that many stores in Canada have found it economical to accept credit cards has:
A) increased the demand for money.
B) decreased the demand for money.
C) increased the demand for credit card transactions but has not affected the demand for money.
D) decreased the demand for credit card transactions but has not affected the demand for money.
Q3) The short-term interest rate applies to financial assets that mature:
A) in less than a year.
B) within a year or more.
C) within 2 years.
D) within 5 years.
To view all questions and flashcards with answers, click on the resource link above.
17
Chapter 16: Inflation, Disinflation, and Deflation
Available Study Resources on Quizplus for this Chatper
221 Verified Questions
221 Flashcards
Source URL: https://quizplus.com/quiz/77529
Sample Questions
Q1) To avoid falling into a liquidity trap,most central banks:
A) seek a positive but small inflation rate rather than zero inflation.
B) target inflation rather than the money supply.
C) conduct open-market operations to change the money supply instead of changing the discount rate.
D) aim at a target of zero inflation so that inflation expectations are zero too.
Q2) Suppose that the unemployment rate rises as the inflation rate declines.This situation is consistent with a movement along the _____ Phillips curve.
A) vertical
B) horizontal
C) positively sloped
D) negatively sloped
Q3) Zimbabwe's inflation problems arose mainly when its president,Robert Mugabe,seized the farmland of the white minority and turned it over to his supporters,which disrupted production and undermined the country's tax base.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
18
Chapter 17: Macroeconomics: Events and Ideas
Available Study Resources on Quizplus for this Chatper
309 Verified Questions
309 Flashcards
Source URL: https://quizplus.com/quiz/77528
Sample Questions
Q1) The recommendation to use monetary policy to stabilize the economy and use fiscal policy only when monetary policy is ineffective is consistent with _____ macroeconomics.
A) classical
B) Keynesian
C) monetarist
D) Great Moderation consensus
Q2) The Great Moderation consensus is that discretionary fiscal policy can be destabilizing because of the political business cycle.
A)True
B)False
Q3) The economic view that reducing tax rates will increase the incentives to work and invest and will ensure a high growth rate of the potential output is known as _____ economics.
A) supply-side
B) demand-side
C) new classical
D) new Keynesian
To view all questions and flashcards with answers, click on the resource link above.
19
Chapter 18: International Macroeconomics
Available Study Resources on Quizplus for this Chatper
441 Verified Questions
441 Flashcards
Source URL: https://quizplus.com/quiz/77527
Sample Questions
Q1) An argument in favour of Britain's adopting the euro was that using the same currency as many other European countries would expand trade and increase productivity.
A)True
B)False
Q2) If a government fixes the exchange rate below the market equilibrium rate,there will be a surplus of its currency.
A)True
B)False
Q3) If a country with floating exchange rates uses an expansionary monetary policy,the domestic interest rate _____,the demand for the domestic currency _____,the supply of the domestic currency _____,and the effect on the exchange rate is _____.
A) falls;falls;rises;ambiguous
B) rises;rises;falls;an increase
C) falls;falls;rises;a decrease
D) falls;remains unchanged;rises;a decrease
Q4) The first country to adopt the euro was Great Britain.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Graphs in Economics
Available Study Resources on Quizplus for this Chatper
60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/77525
Sample Questions
Q1) (Figure: Illustrating Slope)Use Figure: Illustrating Slope.In the graph,line 3 depicts X and Y to be:
A) positively related.
B) unrelated.
C) negatively related.
D) both fixed in value.
Q2) If two variables are negatively related,they will always be represented by a:
A) line or curve that slopes downward.
B) straight line.
C) horizontal line.
D) line or curve that slopes upward.
Q3) (Figure: y = f(x))Use Figure: y = f(x).The slope of the relation between x and y is:
A) positive and constant.
B) negative and getting steeper.
C) positive and getting steeper.
D) positive and getting flatter.
Q4) A linear curve has the same slope between every pair of points.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 21