Course Introduction
Economics I Study Guide Questions
Economics I introduces students to the foundational principles of microeconomics and macroeconomics. The course explores topics such as supply and demand, market equilibrium, consumer and producer behavior, the role of government in the economy, and the functioning of different types of markets. Students will also examine macroeconomic indicators, national income, inflation, unemployment, and basic policy tools. Emphasis is placed on understanding how economic decisions are made by individuals, businesses, and governments, and on applying economic reasoning to real-world problems.
Recommended Textbook
ECON Macro Principles of Macroeconomics 1st Canadian Edition by Moir OShaughnessy
Available Study Resources on Quizplus
20 Chapters
2444 Verified Questions
2444 Flashcards
Source URL: https://quizplus.com/study-set/1672
Page 2
Chapter 1: The Art and Science of Economic Analysis
Available Study Resources on Quizplus for this Chatper
108 Verified Questions
108 Flashcards
Source URL: https://quizplus.com/quiz/33141
Sample Questions
Q1) Which of the following describes a service?
A) anything that is scarce and which satisfies unlimited human wants
B) a thing for which people pay money
C) an intangible activity that satisfies human wants
D) any output produced by the fast-food industry
Answer: C
Q2) Why do economists develop theories to explain the reality of economic behaviour?
A) because theories simplify a complex reality
B) because theories confront reality in all its complexity by focusing on the unique aspects of each phenomenon
C) because theories explain phenomena without predicting them
D) because theories predict phenomena without explaining them
Answer: A
Q3) Given that resources are scarce, which statement best describes this reality?
A) Opportunity costs are zero.
B) People must make choices.
C) All human wants and desires can be satisfied.
D) Resource prices are fixed.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Economic Tools and Economic Systems
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/33143
Sample Questions
Q1) Which statement describes how accurately a person's opportunity cost can be measured?
A) It can be easily and accurately calculated.
B) It cannot even be estimated.
C) It does NOT change over time.
D) The ability to calculate it varies, depending on time and circumstances.
Answer: D
Q2) Which of the following best describes the concept of sunk costs?
A) They can only be measured in monetary terms.
B) They are opportunity costs.
C) They should influence a person's choice if that person is a marginal decision maker.
D) They should NOT be considered when making economic decisions.
Answer: D
Q3) Refer to the exhibit.What are Hans and Maria's trading opportunities?
A) Maria has an absolute and a comparative advantage in typing.
B) Maria has an absolute and a comparative advantage in doing laundry.
C) Hans has an absolute and a comparative advantage in typing.
D) Hans has an absolute advantage in doing laundry.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Economic Decision Makers
Available Study Resources on Quizplus for this Chatper
145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/33144
Sample Questions
Q1) Which of the following would economists generally assume that households would seek to maximize?
A) dividends
B) wealth
C) utility
D) revenue
Answer: C
Q2) What were government anticompetitive laws designed to do?
A) to encourage the production of public goods
B) to prevent natural monopolies
C) to prevent collusion among firms
D) to regulate natural monopolies
Answer: C
Q3) Which of the four types of economic decision makers is most important?
A) firms, because they produce all goods and services in the economy
B) households, because they demand goods and services and supply resources
C) governments, because they ultimately set and enforce the "rules of the game"
D) the rest of the world, because there are over 150 countries
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Demand, Supply, and Markets
Available Study Resources on Quizplus for this Chatper
203 Verified Questions
203 Flashcards
Source URL: https://quizplus.com/quiz/33145
Sample Questions
Q1) Why will an increase in the number of producers of a good increase the market supply?
A) because the price will rise
B) because the market demand increases too
C) because market supply is the sum of all individual supply curves
D) because all suppliers have identical supply curves
Q2) Refer to the exhibit.Suppose a price floor is established at $20.What is the result?
A) a surplus of 10 units
B) a shortage of 20 units
C) a surplus of 20 units
D) no change from the situation that exists at the equilibrium price
Q3) What is the income effect of an increase in the price of backpacks (a normal good)?
A) a decrease in the demand for backpacks
B) a decrease in the quantity demanded of backpacks
C) an increase in the demand for backpacks
D) an increase in the quantity demanded of backpacks
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Algebraic Approach to Demand, Supply, and Equilibrium
Available Study Resources on Quizplus for this Chatper
12 Verified Questions
12 Flashcards
Source URL: https://quizplus.com/quiz/33146
Sample Questions
Q1) Market demand is given as Qd = 100 - 2P.Market supply is given as Qs = P + 10.What would result if the market price were $40?
A) a shortage of 30
B) a surplus of 60
C) a surplus of 30
D) a shortage of 60
Q2) Market demand is given as Qd = 100 - 2P.Market supply is given as Qs = P + 10.What would result if the market price were $20?
A) a shortage of 30
B) a surplus of 60
C) a surplus of 30
D) a shortage of 60
Q3) Refer to the exhibit.At the equilibrium price, what would producer surplus be?
A) $480
B) $640
C) $1120
D) $1280
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Introduction to Macroeconomics
Available Study Resources on Quizplus for this Chatper
122 Verified Questions
122 Flashcards
Source URL: https://quizplus.com/quiz/33147
Sample Questions
Q1) During the Great Depression of the 1930s, U.S.president Herbert Hoover introduced an economic policy that turned out to be flawed.What was this policy?
A) a decrease in taxes
B) an increase in taxes
C) an increase in government spending
D) a decrease in government spending
Q2) Which of the following is NOT a flow variable?
A) the amount of spending by consumers this holiday season
B) the number of times a dollar bill is spent in a day
C) the number of shares of stock traded per week
D) the $100 Susan keeps in her purse, in case an emergency arises
Q3) Which of the following would NOT be considered a supply-side approach to increasing growth?
A) improving the quality of human capital
B) investing in research and development
C) replacing obsolete plants with new ones
D) increasing transfer payments to retirees
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Tracking the Canadian Economy
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/33148
Sample Questions
Q1) If GDP rises, what happens to income and expenditure?
A) Income and expenditure must rise.
B) Income and expenditure must fall.
C) Income must rise, but expenditure may rise or fall.
D) Expenditure must rise, but income may rise or fall.
Q2) How does net domestic product (NDP) differ from gross domestic product (GDP)?
A) GDP includes expenditures for gross products that pollute the environment, but NDP does NOT.
B) GDP is gross because it values spending on each good and service in dollar terms, but NDP excludes taxes.
C) GDP includes exports, but NDP omits exports.
D) GDP includes that part of the capital stock used up in the production process, but NDP does NOT.
Q3) Suppose a product becomes widely used.How would this tend to be reflected in the consumer price index over time?
A) Inflation would be understated.
B) Inflation would NOT be affected.
C) Inflation would be overstated.
D) The inflation rate would become zero.
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Unemployment and Inflation
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/33149
Sample Questions
Q1) Suppose the interest rate increases.Other things constant, how will the loanable funds market be affected?
A) The supply of loanable funds curve will shift to the left.
B) The supply of loanable funds curve will shift to the right.
C) The quantity of loanable funds supplied will increase.
D) The quantity of loanable funds demanded will increase.
Q2) Why does the official unemployment rate disguise the extent of the unemployment problem?
A) because retired persons are NOT counted as unemployed
B) because full-time students are NOT counted as unemployed
C) because discouraged workers are counted as unemployed
D) because people who are overqualified for their current jobs are NOT considered unemployed
Q3) Which of the following was a result of increased oil prices during the 1970s?
A) Aggregate demand increased, causing demand-pull inflation.
B) Aggregate demand decreased, causing cost-push inflation.
C) Aggregate supply increased, causing cost-push inflation.
D) Aggregate supply decreased, causing cost-push inflation.
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Productivity and Growth
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/33150
Sample Questions
Q1) What will an increase in the amount of capital per worker do to labour and capital productivities?
A) Labour productivity will increase, but capital productivity will stay the same.
B) Capital productivity will increase, but labour productivity will stay the same.
C) Labour productivity will increase and capital productivity will increase.
D) Labour productivity will decrease and capital productivity will decrease.
Q2) Which of the following is NOT included in the "rules of the game"?
A) the laws, customs, conventions, and other institutional elements associated with trade
B) property rights
C) a market process that generates a fair price for all
D) a stable political environment
Q3) In the long run, on average, what has changing technology led to?
A) lower employment and lower wage rates
B) higher employment and lower wage rates
C) higher incomes and more leisure time
D) higher employment but no change in wage rates
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Aggregate Expenditure and Aggregate
Demand
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/33151
Sample Questions
Q1) Suppose Herbert spends two-thirds of any extra income he receives.And suppose that Herbert engages in new autonomous spending of $10, which causes equilibrium to increase.What is the amount of the equilibrium increase?
A) $6.67
B) $15.00
C) $16.67
D) $30.00
Q2) Which of the following does NOT happen when planned aggregate expenditure is greater than output?
A) Real GDP demanded rises.
B) Real GDP demanded falls.
C) Real GDP demanded stays the same.
D) Real GDP demanded first rises, and then falls.
Q3) What is reflected by the aggregate demand curve's downward slope to the right?
A) a relationship between the price level and real GDP
B) a relationship between the price level and interest rates
C) a relationship between the price level and the saving rate
D) a relationship between the price level and the investment level
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Aggregate Supply
Available Study Resources on Quizplus for this Chatper
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/33152
Sample Questions
Q1) Which of the following would cause the short-run aggregate supply curve to shift leftward?
A) a drop in energy prices
B) workers opting for more leisure time and less time on the job
C) new investment spending that is greater than depreciation of the capital stock
D) a technological breakthrough, with widespread practical applications, that occurs in the microcomputer industry
Q2) Suppose that the actual price level and the expected price level are initially equal, and that the expected price level rises.Which of the following will occur over the long run?
A) The economy will move rightward along the short-run aggregate supply curve.
B) The economy will move leftward along the short-run aggregate supply curve.
C) The short-run aggregate supply curve will shift to the right.
D) The short-run aggregate supply curve will shift to the left.
Q3) Which of the following causes the capital stock to increase?
A) whenever gross investment is positive
B) whenever gross investment is negative
C) when net investment is positive
D) when net investment is negative
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/33153
Sample Questions
Q1) How are transfer payments, such as welfare benefits, affected during economic contractions?
A) Transfer payments automatically increase, reducing incomes further.
B) Transfer payments automatically increase, thus reducing the impact of the contraction on disposable income.
C) Transfer payments automatically decrease, because tax revenues fall and welfare benefits are no longer affordable.
D) Transfer payments automatically decrease, as a discretionary move on the part of Parliament to stimulate expansion.
Q2) When government purchases increase, what does the spending multiplier illustrate?
A) the amount of movement along the aggregate demand curve
B) the amount of movement along the aggregate supply curve
C) the extent of the rightward shift of the aggregate demand curve at a given price level
D) the extent of the rightward shift of the aggregate supply curve at a given price level
To view all questions and flashcards with answers, click on the resource link above.
14
Chapter 13: Money and the Financial System
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/33154
Sample Questions
Q1) Which of the following describes the cycle of events that led up to the economic crisis in the United States in 2008?
A) Demand for houses decreased, which lowered housing prices, which in turn fuelled a boom in subprime loans.
B) Demand for housing decreased, which raised housing prices, which in turn fuelled a boom in subprime loans.
C) Demand for housing increased, which lowered housing prices, which in turn fuelled a boom in subprime mortgages.
D) Demand for housing increased, which raised housing prices, which in turn fuelled a boom in subprime loans.
Q2) What did the earliest type of exchange involve?
A) coins
B) barter
C) commodity money
D) fiat money
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Banking and the Money Supply
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/33155
Sample Questions
Q1) What is the Bank of Canada's most important monetary policy tool?
A) printing money
B) clearing cheques
C) conducting open-market operations
D) setting the bank rate
Q2) Which of the following is included in the narrowest definition of the money supply?
A) cash in bank vaults
B) savings deposits
C) negotiable certificates of deposit
D) chequable deposits
Q3) Suppose the bank manager wants to increase the bank's profitability.Which of the following strategies is the bank manager likely to use?
A) hold more of the bank's assets in required reserves
B) hold more of the bank's assets in excess reserves
C) reduce the liquidity of a bank's assets
D) meet all depositors' requests for funds with little trouble
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Monetary Theory and Policy in an Open Economy
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/33156
Sample Questions
Q1) In order for interest rates to remain stable during economic contractions, what action should monetary authorities take?
A) They should reduce the demand for money.
B) They should match the rate of growth in the money supply to the rate of growth in nominal GDP.
C) They should reduce the rate of growth in the money supply to below the rate of growth in the demand for money.
D) They should slow the growth of the money supply, or even let the money supply shrink.
Q2) Suppose money supply decreases, causing the interest rate to rise.What is the effect on GDP?
A) GDP decreases by more than the increase in the interest rate because of the multiplier.
B) GDP decreases by the same amount as the decrease in investment.
C) GDP decreases by more than the decrease in investment because of the multiplier.
D) GDP decreases by less than the decrease in investment because of the multiplier.
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 16: Macro Policy Debate: Active or Passive
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/33157
Sample Questions
Q1) What is an implementation lag?
A) the time it takes policymakers to decide what to do
B) the time it takes for the chosen policy to have its full impact on the economy
C) the time it takes to identify trouble in the economy and to assess its severity
D) the time it takes to introduce a change in monetary or fiscal policy
Q2) Refer to the graph in the exhibit.According to policymakers who favour an active approach to policy, how can the economy attain equilibrium at potential output?
A) by shifting the SRAS curve shift to the left
B) by shifting the SRAS curve shift to the right
C) by increasing the money supply or by increasing government spending
D) by decreasing aggregate demand
Q3) Suppose an economy is at an unemployment level that corresponds to the potential output level.Which curve would represent this situation?
A) the long-run Phillips curve
B) the short-run Phillips curve
C) the mid-term Phillips curve
D) the self-correcting Phillips curve
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 17: International Finance
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/33158
Sample Questions
Q1) Suppose the government is faced with a continual excess demand for foreign exchange.Which of the following strategies would the government choose to pursue in order to eliminate the disequilibrium situation?
A) increase the peg or devalue
B) engage in fiscal policy and raise the country's income level
C) engage in monetary policy and lower interest rates
D) increase the inflation rate
Q2) Which of the following describes Canadian merchandise trade balance from 1981 to 2007?
A) The trade balance was always in surplus.
B) The trade balance was always in deficit.
C) The trade balance was sometimes in surplus and sometimes in deficit.
D) The trade balance was always equal.
Q3) Which of the following contributed to the collapse of the Bretton Woods system?
A) The United States had chronic trade surpluses.
B) Exchange rates were fixed.
C) The supply of gold was insufficient.
D) West Germany allowed the U.S. dollar to float against the mark.
To view all questions and flashcards with answers, click on the resource link above.
Page 19
Chapter 18: International Trade
Available Study Resources on Quizplus for this Chatper
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/33159
Sample Questions
Q1) Refer to the graph in the exhibit.The world price of a baseball is $3.With free trade, how many baseballs will Canada import?
A) 4,000
B) 6,000
C) 8,000
D) 10,000
Q2) Which two groups benefit from an import quota when quota rights are given away without charge?
A) domestic producers and foreign producers
B) domestic producers and foreign consumers
C) domestic governments and foreign consumers
D) domestic governments and domestic producers
Q3) Refer to the graph in the exhibit.Suppose the country is initially trading without restrictions at a world price of $2.00, and an import quota of 50 units per month is enacted.How much will domestic production increase?
A) It will increase from 100 to 125 units per month.
B) It will increase from 100 to 150 units per month.
C) It will increase from 100 to 175 units per month.
D) It will increase from 100 to 200 units per month.
To view all questions and flashcards with answers, click on the resource link above.
Page 20
Chapter 19: Economic Development
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/33160
Sample Questions
Q1) Which of the following is a trend in developing countries?
A) The birth rate during a typical woman's lifetime has increased from three children to six children.
B) Attitudes toward family size are changing.
C) When women have employment opportunities outside the home, fertility rates increase.
D) As women become better educated, they earn less money.
Q2) Which of the following types of economies has the lowest malnutrition rate among children less than 5 years of age?
A) middle-income economies
B) low-income economies
C) high-income economies
D) sub-Saharan African economies
Q3) What is the value added per farm worker in Canada compared to the value added per farm worker in low-income and middle-income countries?
A) five times greater in Canada
B) ten times greater in Canada
C) seventy-five times greater in Canada
D) 500 times greater in Canada
To view all questions and flashcards with answers, click on the resource link above.
Page 21
Chapter 20: Understanding Graphs
Available Study Resources on Quizplus for this Chatper
52 Verified Questions
52 Flashcards
Source URL: https://quizplus.com/quiz/33142
Sample Questions
Q1) Refer to the exhibit.What does point c represent?
A) x = 30, y = 60
B) x = 60, y = 30
C) c = 90
D) x + y = 60
Q2) Refer to the exhibit.At y = 10, what is the value of x?
A) It is larger on curve A than on curve B.
B) It is smaller on curve A than on curve B.
C) It is the same on both curves.
D) It is indeterminate.
Q3) Refer to the exhibit.Which statement best describes line D?
A) A decrease in P is associated with a decrease in Q.
B) There is no relation between P and Q.
C) There is an inverse relationship between P and Q.
D) There is a positive relationship between P and Q.
Q4) Refer to the exhibit.What does point a represent?
A) the origin
B) x = 0, y = 50
C) x = 50, y = 0
D) x + y = 50
To view all questions and flashcards with answers, click on the resource link above. Page 22