Economics for Social Sciences
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Course Introduction
Economics for Social Sciences introduces students to the fundamental principles of economics with an emphasis on their application to social issues and human behavior. The course covers essential concepts such as supply and demand, market structures, production and consumption, and the role of government in the economy. By exploring topics like poverty, inequality, public goods, and externalities, students gain insights into how economic theories and tools can be used to analyze and address social challenges. Through case studies and real-world examples, learners develop a critical understanding of how economic policies impact society and inform decision-making in various social science fields.
Recommended Textbook
Macroeconomics 3rd Edition Canadian by Paul Krugman Robin Wells
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19 Chapters
5325 Verified Questions
5325 Flashcards
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Chapter 1: First Principles
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Sample Questions
Q1) Trade theoretically allows people to get more of what they want.
A)True
B)False
Answer: True
Q2) Which statement is NOT a reason that markets usually lead to efficiency?
A) People are naturally efficient.
B) Individuals have incentives to offer what people want.
C) Trade encourages efficiency.
D) Inefficient firms will lose business.
Answer: A
Q3) For a student who owns his or her own home and doesn't plan to live on campus,the cost of going to university is:
A) tuition and the cost of housing.
B) tuition,the cost of housing,and the cost of books and other school materials.
C) tuition,the cost of books and other school materials,and forgone income.
D) forgone income only.
Answer: C
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Chapter 2: Economic Models: Trade-Offs and Trade
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Sample Questions
Q1) (Figure: Strawberries and Submarines II)Use Figure: Strawberries and Submarines II.Point F is:
A) unattainable,all other things unchanged.
B) attainable if the quantity and/or quality of factors decreases.
C) attainable if the economy is able to reach full employment.
D) feasible but not efficient.
Answer: A
Q2) A normative statement deals with:
A) the facts.
B) what was,is,or will be.
C) what ought to be.
D) the scientific method.
Answer: C
Q3) "Unemployment of 5% is too high" is:
A) a normative statement.
B) a positive statement.
C) the circular-flow model.
D) an example of comparative advantage.
Answer: A
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Page 4
Chapter 3: Supply and Demand
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Sample Questions
Q1) Assume that corn is an input in the production of beef but not in the production of pork.Further,beef and pork are substitutes in consumption.A decrease in the price of corn will _____ the supply of beef and _____ the demand for pork.
A) increase;increase B) decrease;increase C) decrease;decrease D) increase;decrease
Answer: D
Q2) A farmer finds that when he produces more corn,he also has more cornstalks that he can sell as decorations.To the farmer,corn and cornstalks are:
A) complements in production.
B) substitutes in production.
C) unrelated goods.
D) inferior goods.
Answer: A
Q3) An increase in income will always shift the demand curve to the right.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Price Controls and Quotas: Meddling With Markets
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Sample Questions
Q1) Assuming that Canadian and French wines are substitutes in consumption,if the Canadian government imposes a quota on the amount of French wine allowed into Canada and the quota is set at a quantity below equilibrium,the price of French wine in Canada will _____ while the price of the Canadian-produced wine will _____. A) increase;increase B) increase;decrease C) decrease;increase D) decrease;decrease
Q2) When transatlantic airfares were set artificially high by an international treaty,airlines offered customers an inefficiently high quality of service.
A)True
B)False
Q3) (Figure: Rent Controls)Use Figure: Rent Controls.Without rent controls,the equilibrium quantity is:
A) Q<sub>4</sub>.
B) Q<sub>1</sub>.
C) Q<sub>2</sub>.
D) Q<sub>3</sub>.
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Chapter 5: International Trade
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Sample Questions
Q1) The Ricardian model of international trade assumes that countries have the usual bowed-out (concave to the origin)production possibility frontiers.
A)True
B)False
Q2) (Table: Production Possibilities)Use Table: Production Possibilities.The opportunity cost of 1 computer for _____ is _____ box(es)of roses.
A) Canada;2
B) Colombia;2
C) Colombia;0.5
D) Canada;1
Q3) In a single year,the Netherlands can raise 100 tonnes of beef or produce 1 000 boxes of tulips.In the same growing season,Belgium can raise 50 tonnes of beef or produce 750 boxes of tulips.Trade will take place between these two countries if 1 tonne of beef costs _____ boxes of tulips.
A) 20
B) 5
C) 12
D) 8
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Chapter 6: Macroeconomics: the Big Picture
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Sample Questions
Q1) Which statement is TRUE?
A) In the past century,the population of Canada has grown faster than output.
B) Long-run growth models and business cycle models are the same.
C) Since World War II,the economy of Argentina has grown faster than the economy of Canada.
D) The level of saving is important for long-run growth.
Q2) Periods in which output and employment are falling in many industries are called: A) recessions.
B) booms.
C) expansions.
D) deflations.
Q3) The view that the government should take an active role in the macroeconomy dates to:
A) the Seven Years' War.
B) World War I.
C) the Great Depression.
D) the Vietnam War.
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Chapter 7: Gdp and the Cpi: Tracking the Macroeconomy
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Sample Questions
Q1) Steel manufactured to make a car is not counted in aggregate output,but the car that results is counted.
A)True
B)False
Q2) (Table: Per Capita GDP)Use Table: Per Capita GDP.If 2011 is the base year,real GDP in 2014 was:
A) $400.
B) $3 000.
C) $4 000.
D) $80 000.
Q3) Households do NOT derive income from:
A) wages or labour income.
B) interest from lending.
C) rent from allowing firms to use their land.
D) imports.
Q4) A transfer payment is a payment for:
A) a military transfer to a war zone.
B) which no services were rendered by the government.
C) transfer of a debt to a different person.
D) being transferred to a different city by your employer.
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Chapter 8: Unemployment and Inflation
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Sample Questions
Q1) If the labour force includes 100 million workers and 5 million people are unemployed but actively seeking work,then the unemployment rate is _____%.
A) 1
B) 5
C) 10
D) 95
Q2) (Figure: The Minimum Wage)Use Figure: The Minimum Wage.What is the quantity of labour demanded at a binding minimum wage of P<sub>3</sub>?
A) Q<sub>1</sub>
B) Q<sub>2</sub>
C) Q<sub>3</sub>
D) Q<sub>4</sub>
Q3) If the actual inflation rate is less than the expected inflation rate:
A) lenders gain and borrowers lose.
B) borrowers gain and lenders lose.
C) everyone benefits.
D) everyone is worse off.
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Chapter 9: Long-Run Economic Growth
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Sample Questions
Q1) The key factor explaining the poor growth performance in Africa is probably:
A) lack of domestic political stability.
B) lack of natural resources.
C) overpopulation.
D) the prevalence of military conflicts among neighbouring countries.
Q2) Government spending is NOT like investment when it:
A) goes to help pay for education.
B) helps provide infrastructure for the economy.
C) is used for public health measures.
D) is used for a personal income tax rebate.
Q3) (Figure: Technological Progress and Productivity Growth)Use Figure: Technological Progress and Productivity Growth.If there is a significant increase in human capital per worker (all other factors remaining unchanged),it is BEST indicated by a move from:
A) A to B.
B) B to A.
C) C to B.
D) B to C.
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Chapter 10: Savings, Investment Spending, and the Financial System
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Sample Questions
Q1) (Table: The National Income Accounts)Use Table: National Income Accounts.The value of tax revenue is:
A) $1.8 trillion.
B) $4.9 trillion.
C) $2.1 trillion.
D) $1.6 trillion.
Q2) When corporations need to borrow large amounts of money,they can minimize their transaction costs by getting many small loans directly from many people.
A)True
B)False
Q3) In an open economy,GDP is $12 trillion this year.Consumption is $8 trillion,and government spending is $2 trillion.Taxes are $0.5 trillion.Exports are $1 trillion,and imports are $3 trillion.How much is investment spending?
A) $2 trillion
B) $3 trillion
C) $3.5 trillion
D) $4 trillion
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Page 12
Chapter 11: Income and Expenditure
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Sample Questions
Q1) (Figure: Planned Aggregate Expenditures Curve II)Use Figure: Planned Aggregate Expenditures Curve II.The slope of the planned aggregate expenditures curve is:
A) 0.25.
B) 0.5.
C) 0.6.
D) 45 degrees.
Q2) In a simple,closed economy (no government or foreign sector),if disposable income increases by $500 and $450 is consumed,$950 is saved.
A)True
B)False
Q3) Suppose the aggregate consumption function is given by C = 1 000 + 0.75YD,where C is consumption and YD is disposable income.If disposable income increases by $100,aggregate consumption will increase by _____ and autonomous consumption
A) $75;remains at $1 000
B) $1 000;remains at $75
C) $100;increases by $100
D) $175;increases by $100
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Chapter 12: Aggregate Demand and Aggregate Supply
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Sample Questions
Q1) When the aggregate price level rises:
A) AD will shift right.
B) SRAS will shift left.
C) there will be a movement along the SRAS curve.
D) AD will shift left.
Q2) An increase in government pension benefits will likely increase consumption and shift the aggregate demand curve to the right.
A)True
B)False
Q3) The nominal wage is the dollar amount of the wage paid.
A)True
B)False
Q4) An advantage of stabilizing macroeconomic policy over economic self-correction is that:
A) stabilization policies achieve potential output with a lower aggregate price level. B) economic self-correction can take a decade or more.
C) economic self-correction affects the aggregate price level but not the aggregate output level.
D) stabilization policies are particularly effective to address supply shocks.
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Chapter 13: Fiscal Policy
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Sample Questions
Q1) According to the text,the public debt of the Canadian federal government at the end of fiscal year 2015 equaled about:
A) $30 trillion.
B) $13.1 trillion.
C) $7.4 trillion.
D) $4.8 trillion.
Q2) When governments borrow in financial markets to pay for budget deficits,interest rates may increase and crowd out private investment spending.
A)True
B)False
Q3) Real GDP equals $400 billion,the government collects 25% of any increase in real GDP in the form of taxes,and the marginal propensity to consume is 0.8.What is the value of the multiplier?
A) 1
B) 2.5
C) 4
D) 5
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Chapter 14: Money, Banking, and the Federal Reserve System
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Sample Questions
Q1) (Scenario: Money Creation)Refer to Scenario: Money Creation.How much of the $1000 deposit is the bank required to keep in reserves?
A) $1000
B) $100
C) $200
D) $800
Q2) When countries replaced gold and silver coins with paper money exchangeable for certain amounts of precious metals,the monetary system evolved from using _____ money to using _____ money.
A) commodity;fiat
B) commodity-backed;fiat
C) commodity;commodity-backed
D) fiat;commodity-backed
Q3) When you are using money to purchase a new car,money is serving as a:
A) store of value.
B) medium of exchange.
C) unit of account.
D) double coincidence of wants.
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Chapter 15: Monetary Policy
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Sample Questions
Q1) (Figure: Money Market I)Refer to Figure: Money Market I.If the interest rate is at i<sub>L</sub> and the central bank neither buys nor sells Treasury bills,then the interest rate will:
A) move towards i<sub>H</sub>.
B) move towards i<sub>L</sub>
C) remain at i<sub>E</sub>.
D) not change.
Q2) If inflation increases from 2% to 5%,the money demand curve will:
A) remain constant.
B) remain constant,but the quantity of money demanded will decrease.
C) shift to the left.
D) shift to the right.
Q3) If the economy is at potential output and the Bank of Canada decreases the money supply,real GDP will likely decrease in the long run.
A)True
B)False
Q4) The demand for money in Japan is much lower than the demand for money in Canada.
A)True
B)False
Page 17
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Chapter 16: Inflation, Disinflation, and Deflation
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Sample Questions
Q1) Expectations of a higher inflation rate shift the short-run aggregate supply curve to the _____,changing the trade-off between inflation and unemployment.As a result,the short-run Phillips curve shifts _____.
A) left;down
B) right;up
C) left;up
D) right;down
Q2) (Figure: Short-Run Phillips Curve)Refer to Figure: Short-Run Phillips Curve.SRPC<sub>2</sub> is based on an expected inflation rate of:
A) zero.
B) 1%.
C) 2%.
D) 5%.
Q3) If the short-run Phillips curve has shifted upward,the _____ curve has shifted to the
A) AD;right
B) AD;left
C) SRAS;right
D) SRAS;left
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Chapter 17: Macroeconomics: Events and Ideas
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Sample Questions
Q1) If the unemployment rate rose,a classical economist would counsel the government to do nothing.
A)True
B)False
Q2) Keynesian economics emphasized that economic downturns could be due to:
A) inflation.
B) technological shocks.
C) a decline in business confidence.
D) deflation.
Q3) The Great Moderation consensus regarding the use of monetary or fiscal policy to reduce unemployment in the long run is that:
A) unemployment can be constantly decreased as long as expectations of inflation are kept low.
B) the natural rate of unemployment limits what monetary and fiscal policy can accomplish.
C) the concept of the nonaccelerating inflation rate of unemployment,or NAIRU,was a mistake.
D) the only effective policy is to maintain a constant growth rate of the money supply.
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Chapter 18: International Macroeconomics
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Sample Questions
Q1) In the 1970s,most European countries were unhappy with floating exchange rates because they made each country's domestic monetary policy ineffective.
A)True
B)False
Q2) A _____ balance on the financial account means a _____.
A) positive;financial account surplus
B) negative;financial account surplus
C) positive;financial account deficit
D) positive;current account surplus
Q3) If asset owners in Japan and Canada consider Japanese and Canadian assets as good substitutes for each other and if the Canadian interest rate is 5% and the Japanese interest rate is 2%,what will NOT occur?
A) Financial inflows will reduce the Canadian interest rate.
B) Financial outflows will increase the Japanese interest rate.
C) The interest rate gap between Canada and Japan will diminish.
D) Loanable funds will be exported from Canada to Japan.
Q4) The Bretton Woods agreement was abandoned in the early 1990s.
A)True
B)False
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Chapter 19: Graphs in Economics
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Sample Questions
Q1) Taylor sees a bar graph showing the average weight of adult males over the past 200 years and concludes that men get more obese over time.Taylor's conclusion may be wrong since she did not consider:
A) the features of construction.
B) omitted variables.
C) reverse causality.
D) tangent lines.
Q2) The relation between two variables that move in opposite directions is said to be:
A) independent.
B) positive.
C) direct.
D) negative.
Q3) A positive relationship between swimsuits purchased and ice cream purchased could be the result of:
A) reverse causality.
B) a magnified scale on the swimsuit axis.
C) a truncation of the ice cream axis.
D) an omitted variable,such as the external temperature.
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