Economics of Canada
Midterm Exam
Course Introduction
This course examines the fundamental principles, structures, and trends that shape the Canadian economy. Students will explore topics such as economic growth, trade, resource management, labor markets, fiscal and monetary policy, and the distinct roles of federal and provincial governments. The course also covers Canadas position in the global economy, its relationship with the United States, the impact of globalization, and current issues such as inequality, Indigenous economic development, and environmental sustainability. Through data analysis, case studies, and policy evaluation, students will develop a comprehensive understanding of the key economic challenges and opportunities facing Canada today.
Recommended Textbook
Macroeconomics Canada in the Global Environment 8th Edition by Michael Parkin
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15 Chapters
1897 Verified Questions
1897 Flashcards
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Page 2
Chapter : 1 What Is Economics
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198 Verified Questions
198 Flashcards
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Sample Questions
Q1) At all points along a straight line,slope is
A)positive.
B)negative.
C)constant.
D)zero.
E)infinity.
Answer: C
Q2) Consider graph (d)of Figure 1A.1.5.Which one of the following statements is true?
A)x and y are negatively related.
B)x and y are unrelated.
C)x and y are positively related.
D)x and y move in opposite directions.
E)both A and D.
Answer: B
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Page 3
Chapter 2: The Economic Problem
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143 Flashcards
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Sample Questions
Q1) A production possibilities frontier will shift outward FOR ALL OF THE FOLLOWING REASONS EXCEPT
A)a technological improvement.
B)an increase in the stock of capital.
C)an increase in the labour force.
D)opportunity cost is increasing.
E)none of the above.
Answer: D
Q2) Refer to Table 2.4.1.For Vulcan,the opportunity cost of producing an additional unit of Y is
A)2/3 units of X.
B)1/2 units of X.
C)2 units of X.
D)3 units of X.
E)4 units of X.
Answer: B
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Chapter 3: Demand and Supply
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178 Flashcards
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Sample Questions
Q1) Refer to Table 3.5.3.The equilibrium price is $________ and the equilibrium quantity is ________ t-shirts per month.
A)6; 200
B)7; 220
C)8; 180
D)8; 220
E)8; 200
Answer: E
Q2) A shift of the supply curve for rutabagas occurs if there is
A)a change in preferences for rutabagas.
B)a change in the price of a related good that is a substitute for rutabagas.
C)a change in income.
D)a change in the price of rutabagas.
E)none of the above.
Answer: E
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Chapter 20: Measuring Gdp and Economic Growth
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Sample Questions
Q1) Gross domestic product is
A)the final value of all goods produced in a country in a given time period.
B)the market value of all goods and services produced in a country during a given time period.
C)the market value of all the final goods and services produced in a country during a given time period.
D)the average value of output produced in a country in a given time period.
E)the market value of all the intermediate goods and services produced in a country during a given time period.
Q2) Refer to Table 20.2.1.From the data in the table,what is total income in Eastland?
A)$1,120
B)$1,180
C)$1,360
D)$1,420
E)$1,280
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Chapter 21: Monitoring Jobs and Inflation
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112 Flashcards
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Sample Questions
Q1) In a country with a working-age population of 20 million,13 million are employed,1.5 million are unemployed,and 1 million of the employed are working part-time,half of whom wish to work full-time.The labour force participation rate is
A)75.5 percent.
B)72.5 percent.
C)65 percent.
D)57.5 percent.
E)none of the above.
Q2) Refer to Table 21.3.1.The reference base period is 2012.The CPI in 2012 is A)100.
B)157.
C)129.
D)64.
E)153.
Q3) In Table 21.2.1,which person is structurally unemployed?
A)A
B)B
C)C
D)D
E)none of them
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Chapter 22: Economic Growth
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90 Flashcards
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Sample Questions
Q1) The Rule of 70 is used to
A)estimate how much of an economy's growth rate is attributable to increases in capital per hour of labour.
B)calculate the standard of living.
C)calculate the economy's growth rate.
D)estimate how long it will take the level of any variable to double.
E)estimate how much of an economy's growth rate is attributable to technological advance.
Q2) Growthland's real GDP per person was $112,000 in 2009 and $117,000 in 2010.What is the growth rate of Growthland's real GDP per person in 2010?
A)4.3%
B)4.5%
C)5%
D)12%
E)17%
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8
Chapter 23: Finance,saving,and Investment
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Sample Questions
Q1) Refer to Figure 23.2.1.In Figure 23.2.1,the economy is at point A on the initial demand for loanable funds curve DLF0.What happens if the real interest rate rises?
A)There is a movement to a point such as B on the demand for loanable funds curve DLF0.
B)The demand for loanable funds curve shifts rightward to curve DLF2.
C)The demand for loanable funds curve shifts leftward to curve DLF1.
D)Either A or B can occur.
E)Either A or C can occur.
Q2) What is the effect of a decrease in expected profit?
A)The demand curve for loanable funds shifts leftward and the real interest rate falls.
B)The supply curve of loanable funds shifts rightward and the nominal interest rate rises.
C)A movement down along the demand curve for loanable funds occurs.
D)The real interest rate rises as saving increases.
E)The demand curve for loanable funds shifts rightward and the real interest rate rises.
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Chapter 24: Money,the Price Level,and Inflation
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Sample Questions
Q1) The Canadian money multiplier is calculated as the
A)change in monetary base divided by the change in deposits.
B)change in quantity of bank notes divided by the change in monetary base.
C)change in monetary base divided by the change in monetary holdings of households.
D)change in the quantity of money divided by the change in the monetary base.
E)change in monetary base divided by the change in quantity of money.
Q2) The Bank of Canada does not do which of the following?
A)Supervise chartered banks.
B)Lend money to the public.
C)Act as a lender of last resort to banks.
D)Issue bank notes.
E)Hold government of Canada securities.
Q3) Which of the following does not affect the size of the monetary base?
A)the amount of notes issued by the Bank of Canada
B)the amount of loans issued by chartered banks
C)the amount of coins issued by the Canadian Mint
D)the amount of chartered bank deposits at the Bank of Canada
E)none of the above
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Chapter 25: The Exchange Rate and the Balance of Payments
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Sample Questions
Q1) The Canadian exchange rate depreciates if A)prices increase in the United States and other countries but remain constant in Canada.
B)the Canadian interest rate rises.
C)the U.S. interest rate rises.
D)all of the above.
E)none of the above.
Q2) China has used a fixed yuan exchange rate and a crawling peg exchange rate.In both cases,China pegs its currency to the A)U.S. dollar.
B)Japanese yen.
C)euro.
D)Mexican peso.
E)Russian ruble.
Q3) The change in Canadian official reserves is recorded in the A)current account.
B)capital and financial account.
C)consumption expenditure account.
D)international investment account.
E)official settlements account.
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Chapter 26: Aggregate Supply and Aggregate Demand
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Sample Questions
Q1) Potential GDP is the level of real GDP at which
A)aggregate demand equals short-run aggregate supply.
B)there is full employment.
C)there is a recessionary gap.
D)there is over-full employment.
E)prices are sure to rise.
Q2) If real GDP is greater than potential GDP,we would expect
A)the money wage rate to fall.
B)the money wage rate to rise.
C)potential GDP to increase.
D)potential GDP to decrease.
E)A and C.
Q3) Short-run macroeconomic equilibrium always occurs when the A)economy is at full employment.
B)economy is below full employment.
C)economy is above full employment.
D)quantity of real GDP demanded equals the quantity of real GDP supplied.
E)AD curve intersects the LAS curve.
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Chapter 27: Expenditure Multipliers: the Keynesian Model
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158 Flashcards
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Sample Questions
Q1) Refer to Figure 27.2.1.When real GDP is equal to Yb,then
A)actual expenditure is less than planned expenditure.
B)actual expenditure is greater than planned expenditure.
C)planned expenditure is equal to actual expenditure.
D)real GDP increases.
E)real GDP decreases.
Q2) When the consumption function lies below the 45° line,households
A)spend all of any increase in disposable income.
B)consume more than their disposable income.
C)are saving some portion of their disposable income.
D)save all of any increase in disposable income.
E)are dissaving.
Q3) An increase in autonomous consumption
A)shifts the consumption function upward.
B)shifts the consumption function downward.
C)creates a movement downward along the consumption function.
D)creates a movement upward along the consumption function.
E)changes the slope of the consumption function.
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Chapter
Business Cycle
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Sample Questions
Q1) At full employment an increase in the quantity of money (ceteris paribus)can create a
A)demand-pull inflation, as can an increase in government expenditure.
B)demand-pull inflation, but an increase in government expenditure cannot.
C)cost-push inflation, as can an increase in government expenditure.
D)cost-push inflation, but an increase in government expenditure cannot.
E)demand-pull and a cost-push inflation, as can an increase in government expenditure.
Q2) If the unemployment rate rises and the inflation rate falls,while the natural unemployment rate and the expected inflation rate remain constant,then we are studying a movement along the A)aggregate demand curve.
B)long-run aggregate supply curve.
C)Friedman curve.
D)short-run Phillips curve.
E)Phelps-Friedman curve.
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14
Chapter 29: Fiscal Policy
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Sample Questions
Q1) A cyclical deficit occurs when
A)government outlays are greater than revenues.
B)government outlays are less than revenues.
C)there is a deficit due to the fact real GDP is greater than potential GDP.
D)there is a deficit due to the fact real GDP is less than potential GDP.
E)there is a deficit even when real GDP equals potential GDP.
Q2) If real GDP is less than potential GDP,which of the following fiscal policies would increase real GDP?
A)a decrease in taxes
B)an increase in government expenditures
C)a fall in the interest rate
D)Both A and B are correct
E)Both B and C are correct.
Q3) The Laffer curve is the relationship between
A)government expenditure and potential GDP.
B)the tax rate and potential GDP.
C)tax revenue and potential GDP.
D)the tax rate and the amount of tax revenue.
E)government outlays and revenues.
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Page 15
Chapter 30: Monetary Policy
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Sample Questions
Q1) The short-run effect of lowering the overnight loans rate is that the
A)price level rises and real GDP increases.
B)price level rises and real GDP decreases.
C)price level lowers and real GDP increases.
D)price level lowers and real GDP decreases.
E)none of the above.
Q2) How is consultation between the Bank of Canada and the Government of Canada on monetary policy arranged?
A)Consultations are arranged at the discretion of the Minister of Finance.
B)No consultation is required or needed.
C)The Bank of Canada Act requires regular consultations between the Governor and the Minister of Finance.
D)Consultations are arranged at the discretion of the Governor of the Bank of Canada.
E)Consultations are arranged through the Parliamentary Committee on Finance.
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Chapter 15: International Trade Policy
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116 Flashcards
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Sample Questions
Q1) Which of the following statements about Canada's international trade in 2010 is correct?
A)The value of Canada's imports exceeded the value of Canada's exports.
B)The value of Canada's exports was about 45 percent of the value of total expenditure in Canada.
C)Canada imported only goods.
D)Canada was the world's second largest trader.
E)Canada exported only goods.
Q2) Dumping occurs when a foreign firm ________.
A)pollutes international waters
B)disposes of waste material internationally
C)sells inferior output to foreigners
D)sells its exports at a lower price than its cost of production
E)sells its output at a lower price in a foreign country than in the country where it produces the good
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