Global Economic Environment
Final Exam Questions
Course Introduction
The Global Economic Environment course explores the interconnectedness of national economies and the forces shaping global markets. Students analyze key macroeconomic indicators, trade theories, international financial systems, and the impact of economic policies on global business dynamics. Emphasis is placed on understanding the roles of international organizations, the effects of globalization, currency fluctuations, emerging markets, and the challenges of economic development. Through case studies and real-world examples, students gain insights into how economic trends and events influence strategic decisions in a rapidly changing international landscape.
Recommended Textbook
Economics Canada in the Global Environment 8th Edition by Michael Parkin
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Page 2
Chapter 1: What Is Economics?
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Sample Questions
Q1) Given the data in Table 1A.4.1,holding y constant,the graph of x and z
A)is a negatively sloped line.
B)is a positively sloped line.
C)reaches a maximum.
D)reaches a minimum.
E)shows that x and z are not related.
Answer: B
Q2) Statements about "what ought to be" are called
A)positive statements.
B)normative statements.
C)economic statements.
D)scientific statements.
E)hypotheses.
Answer: B
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Chapter 2: The Economic Problem
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Sample Questions
Q1) The main functions of markets include
A)promoting the social interest, but not the self-interest.
B)selling goods but not factors of production.
C)enabling buyers and sellers to get information about each other.
D)establishing a physical location for business transactions.
E)promoting the self-interest but not the social interest.
Answer: C
Q2) Mexico and Canada produce both oil and apples using labour only.A barrel of oil is produced with 4 hours of labour in Mexico and 8 hours of labour in Canada.A bushel of apples is produced with 8 hours of labour in Mexico and 12 hours of labour in Canada.Canada has
A)an absolute advantage in oil production.
B)an absolute advantage in apple production.
C)a comparative advantage in oil production.
D)a comparative advantage in apple production.
E)none of the above.
Answer: D
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Chapter 3: Demand and Supply
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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) The y- axis intercept of the supply curve is 40 and the slope is 6.The equation of the supply curve is ________.
A)P = 3 + 40QS
B)P = 40 + 6QS
C)P = 40 - 6QS
D)QS = 40 + 6P
E)QS = 40 - 6P
Answer: B
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Chapter 4: Elasticity
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Sample Questions
Q1) The demand for corn increases.As a result,the price of corn ________,and the less elastic the supply of corn,the ________ will be the effect on the price.
A)falls;smaller
B)falls;greater
C)rises;smaller
D)rises;greater
E)None of the above because the change in the price is effected by the price elasticity of demand.
Q2) Given the relationship shown in Figure 4.1.3 between total revenue from the sale of a good and the quantity of the good sold,then
A)this is an inferior good.
B)this is a normal good.
C)the price elasticity of demand is zero.
D)demand for this good is perfectly elastic.
E)the price elasticity of demand is 1.
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Chapter 5: Efficiency and Equity
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Sample Questions
Q1) Consider the market for hot dogs.If this market becomes a monopoly,then there will be
A)underproduction of hot dogs.
B)overproduction of hot dogs.
C)a deadweight loss in the market for hot dogs.
D)an efficient quantity of hot dogs.
E)both A and C are correct.
Q2) A contest allocates resources to A)a winner or a group of winners.
B)an athlete.
C)a gambler.
D)the government.
E)private firms.
Q3) When demand is perfectly elastic,then consumer surplus is A)infinite.
B)zero.
C)1.00.
D)-1.00.
E)between zero and 1.00.
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Page 7
Chapter 6: Government Actions in Markets
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Sample Questions
Q1) Suppose the government introduces a ceiling on the fees that lawyers are permitted to charge.This fee ceiling
A)is always inefficient.
B)results in an inefficient use of resources when the ceiling is above the equilibrium fee.
C)results in an efficient use of resources when the ceiling is above the equilibrium fee.
D)results in an efficient use of resources when the ceiling is below the equilibrium fee.
E)is always efficient.
Q2) The buyer pays most of a tax if demand is relatively inelastic because
A)the buyer cannot easily substitute to other markets.
B)the buyer can easily substitute to other markets.
C)the government forces the seller to bear the burden of the tax.
D)there is a black market for this good.
E)the seller cannot easily substitute to other goods.
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8
Chapter 7: Global Markets in Action
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Sample Questions
Q1) If a country imposes a tariff on an imported good,the tariff ________ the price in the importing country and ________ the quantity of imports.
A)raises;increases
B)raises;does not change C)lowers;does not change D)lowers;increases E)raises;decreases
Q2) Of the following,in which decade were Canada's tariffs at their lowest level?
A)2000s
B)1970s
C)1950s
D)1930s
E)1890s
Q3) In Figure 7.2.2,with international trade Canadian firms buy ________ helicopters per year.
A)240
B)480
C)720
D)360
E)600
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Chapter 8: Utility and Demand
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Sample Questions
Q1) The fact that your fourth slice of pizza does not generate as much satisfaction as your third slice is an example of
A)consumer surplus.
B)diminishing total utility.
C)diminishing marginal utility.
D)the paradox of value.
E)the law of demand.
Q2) Danny has $12 to spend on two goods: pies and pop.The price of a pie is $4,and the price of a can of pop is $2.To maximize his utility,Danny buys
A)2 pies and 2 cans of pop.
B)3 pies and no pop.
C)the combination that gives him the same marginal utility per dollar on pies as on pop.
D)6 cans of pop and no pie.
E)the combination that gives him the same total utility from pies as from pop.
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10
Chapter 9: Possibilities, Preferences, and Choices
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Sample Questions
Q1) Jay has an income of $10 to buy peanuts and popcorn.The price of peanuts is $1 a bag and the price of popcorn is $2 a bag.He chooses to consume 5 bags of peanuts and 2 bags of popcorn.What can we say about this consumption choice?
A)It is not the best affordable choice.He should consume more peanuts, more popcorn, or more of both.
B)It is the best affordable choice, and his marginal rate of substitution equals the slope of the budget line.
C)The consumption choice is on the budget line.
D)The consumption choice is outside the budget line.
E)both B and C
Q2) Which one of the graphs in Figure 9.2.1 shows perfect substitutes?
A)(a)
B)(b)
C)(c)
D)(d)
E)(c)and (d)
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11
Chapter 10: Organizing Production
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Sample Questions
Q1) A four-firm concentration ratio of less than 60 percent indicates A)a monopoly.
B)a market that is dominated by a few firms.
C)a competitive market.
D)an oligopoly.
E)an absence of competition.
Q2) A firm with a single owner who has unlimited liability is
A)a corporation.
B)a sole proprietorship.
C)a limited partnership.
D)an unlimited partnership.
E)a cooperative.
Q3) A sole proprietorship
A)dies with the owner.
B)is the same as a partnership.
C)always bring a higher return to its owner than a corporation brings to its owners.
D)is a not-for-profit firm.
E)has a complex management structure.
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12
Chapter 11: Output and Costs
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Sample Questions
Q1) The average product of labour is
A)the inverse of the average product of capital.
B)the slope of the marginal product of labour curve.
C)the slope of the total product curve.
D)greater than the average product of labour.
E)calculated as total product divided by the total quantity of labour employed.
Q2) Which of the following quotes best illustrates the idea of fixed cost?
A)"As we increase output, per-unit costs fall."
B)"My primary source of overhead cost is the cost of running the head office."
C)"If I need to, I can negotiate more overtime with my work force to meet unexpected orders."
D)"If I double the number of workers and trucks, I get only 80 percent more packages delivered."
E)None of the above.
Q3) The total output produced with any quantity of labour is equal to the sum of the
A)average products of each of the workers hired.
B)marginal costs of each of the workers hired.
C)marginal products of each of the workers hired.
D)average costs of each of the workers hired.
E)fixed products of each of the workers hired.
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Chapter 12: Perfect Competition
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Sample Questions
Q1) Refer to Figure 12.4.4,which shows the cost curves for a perfectly competitive firm.If all firms in the market have the same cost curves and the price is $16 per unit,
A)the market is in long-run equilibrium.
B)in the long run, firms will leave this market.
C)in the long run, the price will fall as new firms enter the market.
D)the firm is making zero economic profit.
E)none of the above
Q2) Refer to Table 12.2.1,which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.The short-run equilibrium price of one unit of the good is
A)$3.
B)$10.
C)$15.
D)$25.
E)$30.
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Chapter 13: Monopoly
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Sample Questions
Q1) An exclusive right granted to a firm to supply a good or service is
A)a licence.
B)a patent.
C)a public franchise.
D)the essential characteristic of natural monopoly.
E)an economy of scale.
Q2) Firms that can price discriminate between customers do so to ________.
A)increase consumer surplus
B)increase employment
C)increase economic profit
D)decrease the quantity they produce
E)increase producer surplus and deadweight loss
Q3) A natural monopoly exists when
A)the government protects the firm by granting an exclusive franchise.
B)production can take place with constant returns to scale.
C)there are no rivals in the market.
D)one firm can supply the entire market at a lower cost than two or more firms.
E)the average total cost curve is upward sloping.
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15
Chapter 14: Monopolistic Competition
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Sample Questions
Q1) Which of the following goods is best described as being sold in a monopolistically competitive market?
A)batteries
B)wheat
C)fast food
D)postage stamps
E)the local newspaper
Q2) Refer to Figure 14.2.3.Assume this firm faces demand curve D?.At the profit-maximizing output level,the firm
A)incurs an economic loss.
B)makes zero economic profit.
C)makes an economic profit.
D)makes less economic profit than that earned by firms in perfect competition.
E)makes an unknown economic profit that is impossible to determine without information concerning the price charged by the rival firms.
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Chapter 15: Oligopoly
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Sample Questions
Q1) In the research and development game of chicken
A)the best strategy for each player is to undertake research and development.
B)the best strategy is for neither player to undertake research and development.
C)the equilibrium is for only one firm to undertake research and development.
D)the equilibrium is unique.
E)no solution can be found.
Q2) If the efficient scale of production only allows three firms to supply a market,the market is a
A)three-firm monopoly.
B)cost-based oligopoly.
C)natural oligopolgy.
D)monopolistic competition.
E)competitive monopoly.
Q3) Consider the cartel of Trick and Gear.The game is repeated indefinitely and each firm employs a tit-for-tat strategy.The equilibrium is called
A)a credible strategy equilibrium.
B)a dominant player equilibrium.
C)a duopoly equilibrium.
D)a trigger strategy equilibrium.
E)a cooperative equilibrium.
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Chapter 16: Externalities
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Sample Questions
Q1) Means of coping with negative externalities include all of the following except A)emission charges.
B)patents.
C)property rights.
D)Pigovian taxes.
E)marketable permits.
Q2) Refer to Table 16.2.3.The first two columns of the table show the demand schedule for electricity from a coal burning utility;the second and third columns show the utility's cost of producing electricity.
The marginal external cost of the pollution created is equal to the marginal cost. Suppose the government levies a pollution tax such that the utility generates the efficient quantity of electricity.The pollution tax is ________ cents a kilowatt hour.
A)2
B)4
C)6
D)8
E)10
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Chapter 17: Public Goods and Common Resources
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Sample Questions
Q1) One way to alleviate the tragedy of the commons is to
A)eliminate production quotas for using the common resource.
B)make the resource private property.
C)allow all individuals to use the common resource free of charge.
D)distribute common resources among those individuals who really need the resource free of charge.
E)set a price of $1 per unit of the common resource because it is an affordable price.
Q2) Although both cable television and air-traffic control are nonrival,they differ from each other because
A)cable television is a private good and air-traffic control is a public good.
B)cable television is a public good and air-traffic control is a private good.
C)cable television is nonexcludable and air-traffic control is a public good.
D)cable television is nonexcludable and air-traffic control is excludable.
E)cable television is excludable and air-traffic control is nonexcludable.
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Chapter 18: Markets for Factors of Production
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Sample Questions
Q1) The income effect of a higher wage is defined as
A)the increased income workers must be paid to be willing to work more.
B)the increased prices of consumer goods that result from increased worker incomes.
C)the increased demand for leisure that results from increased worker incomes.
D)the increased workers' purchasing power that results from increased worker incomes.
E)all of the above.
Q2) The four factors of production are
A)productive factors, neutral factors, entrepreneurial factors, and nonproductive factors.
B)men, women, animals, and children.
C)labour, capital, entrepreneurship, and land.
D)machines, factories, buildings, and farms.
E)labour, money, profits, and land.
Q3) Coal is an example of
A)a nonrenewable natural resource.
B)a renewable natural resource.
C)capital.
D)a common resource.
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Chapter 19: Economic Inequality
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Sample Questions
Q1) Customer discrimination against female realtors ________ the number of female realtors and ________ their perceived value of marginal product.
A)decreases;decreases
B)decreases;increases
C)increases;increases
D)increases;decreases
E)decreases;does not change
Q2) Complete the following sentence.Passing on wealth from one generation to another
A)can decrease the inequality of wealth.
B)will decrease the inequality of income.
C)is limited since the government taxes this at a very high marginal tax rate.
D)is one of the main causes of social unrest.
E)will make the distribution of wealth more closely match the distribution of human capital.
Q3) In 2009,the median household income in Canada was
A)$5,000.
B)$25,000.
C)$48,300.
D)$59,700.
E)$65,000.
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Chapter 20: Measuring GDP and Economic Growth
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Sample Questions
Q1) The underground economy is any economic activity that
A)produces intermediate goods or services.
B)is not taxed.
C)is unreported or illegal.
D)has negative social value.
E)is conducted underground.
Q2) If you want to investigate the claim that more goods and services were produced in the economy during 2011 than 2012,what should you look at?
A)real GDP
B)nominal GDP
C)intermediate GDP
D)GDP calculated using the expenditure approach
E)either B or D
Q3) From the following list,choose the item that would be included in a current measure of GDP.
A)the purchase of a previously owned house that was built last year
B)a social security cheque for $500
C)the purchase of 10 litres of gasoline for your car
D)a $2,000 cheque from your Aunt Grace
E)income from the sale of your Canadian Snowfun stocks
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Chapter 21: Monitoring Jobs and Inflation
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Sample Questions
Q1) Counting discouraged workers as unemployed would
A)not change the measured unemployment rate.
B)lower the measured unemployment rate.
C)raise the natural unemployment rate.
D)raise the full employment rate.
E)raise the measured unemployment rate.
Q2) In Table 21.2.1,which person is cyclically unemployed?
A)A
B)B
C)C
D)D and B
E)A and C
Q3) If prices at Wendy's rise,more consumers buy their meals at McDonald's and fewer consumers buy their meals at Wendy's.This is an example of
A)consumers' action to boycott Wendy's.
B)outlet substitution.
C)commodity substitution.
D)both A and B.
E)both B and C.
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Page 23
Chapter 22: Economic Growth
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Sample Questions
Q1) Labour productivity rises when
A)technological progress is stagnant.
B)firms invest more in hiring workers than in replacing worn-out capital.
C)the amount of capital per worker decreases.
D)the real wage rate falls.
E)the amount of capital per worker increases.
Q2) All of the following statements are included in new growth theory except ________.
A)discoveries are a public capital good
B)discoveries result from choices
C)the forces of competition destroy incentives to make new discoveries
D)discoveries bring profit, and competition destroys profit
E)knowledge is capital that is not subject to the law of diminishing returns
Q3) If the real wage rate is $10.00 an hour and the price level is 60,the money wage rate is
A)$16.75 an hour.
B)$18.50 an hour.
C)$10.00 an hour.
D)$6.00 an hour.
E)$16.67 an hour.
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Page 24
Chapter 23: Finance, Saving, and Investment
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Sample Questions
Q1) Changes in all of the following shift the supply curve of loanable funds EXCEPT
A)the real interest rate.
B)wealth.
C)disposable income.
D)expected future income.
E)default risk.
Q2) Which of the following is correct?
A)As disposable income increases, the real interest rate rises.
B)As disposable income decreases, saving decreases.
C)The higher a household's wealth the greater is its saving.
D)Both B and C are correct.
E)Both A and C are correct.
Q3) A decrease in the real interest rate leads to a ________ the demand for loanable funds curve,and a decrease in expected profit leads to a ________ the demand for loanable funds curve.
A)rightward shift of;leftward shift of
B)movement down along;movement up along
C)rightward shift of;movement up along
D)movement down along;leftward shift of E)movement down along;rightward shift of
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Chapter 24: Money, the Price Level, and Inflation
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Sample Questions
Q1) Choose the statement that is incorrect.
A)A chartered bank is a private firm, chartered under the Bank Act of 1992 to receive deposits and make loans.
B)A credit union is a cooperative organization that operates under the Co-operative Credit Association Act of 1992.
C)A caisse populaire is similar to a credit union.
D)Trust and mortgage loan companies receive deposits, make loans, and act as trustee for pension funds and for estates.
E)Trust and mortgage loan companies have the bulk of the deposits in M1 and M2.
Q2) Suppose that the banking system has excess reserves of $10 million,the desired reserve ratio is 10 percent and the currency drain ratio is 40 percent.By how much will the quantity of money increase?
A)$12.5 million
B)$28 million
C)$50 million
D)$40 million
E)$22 million
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Chapter 25: The Exchange Rate and the Balance of Payments
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Q1) A change in the exchange rate,other things remaining the same,brings a
A)change in the quantity of Canadian dollars demanded and a movement along the demand curve.
B)change in the quantity of Canadian dollars demanded with no movement along the demand curve.
C)shift of the demand curve for Canadian dollars with a movement along the demand curve.
D)change in the quantity of Canadian dollars demanded and a shift of the demand curve.
E)shift of the demand curve for Canadian dollars with no movement along the demand curve.
Q2) The official settlements account measures the A)value of Canadian merchandise purchased by foreigners.
B)net value of foreign goods officially purchased by Canada.
C)net value of Canadian official exports of services.
D)change in the government's holdings of foreign currency.
E)change in Canada's net exports.
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Chapter 26: Aggregate Supply and Aggregate Demand
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Sample Questions
Q1) Refer to Figure 26.3.5.Potential GDP is
A)$13 trillion.
B)$13.5 trillion.
C)more than $13 trillion and less than $13.5 trillion.
D)less than $13 trillion.
E)100
Q2) An inflationary gap is the amount by which
A)potential GDP exceeds real GDP.
B)demand must increase to achieve full employment at a given price level.
C)supply must increase to achieve full employment at a given price level.
D)the price level must adjust to achieve full employment.
E)real GDP exceeds potential GDP.
Q3) 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.
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Chapter 27: Expenditure Multipliers: The Keynesian Model
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Sample Questions
Q1) 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.
Q2) The marginal propensity to consume is the
A)fraction of the first dollar of disposable income received that is saved.
B)fraction of the first dollar of disposable income received that is consumed.
C)fraction of the last dollar of disposable income received that is saved.
D)fraction of a change in disposable income that is spent on consumption.
E)total amount of consumption divided by the total amount of disposable income.
Q3) The slope of the aggregate planned expenditure curve is equal to A)[b(1 - t)- m].
B)the marginal propensity to consume.
C)the marginal propensity to import.
D)1 minus the marginal propensity to import.
E)the autonomous expenditure multiplier.
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Chapter 28: Canadian Inflation, Unemployment, and Business Cycle
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Q1) Suppose that a severe shock that decreases the demand for loanable funds hits Canada.Which of the following can we expect to occur according to real business cycle theory?
A)The real interest rate will fall.
B)People will work fewer hours.
C)The real wage rate will fall.
D)The demand for loanable funds will decrease.
E)All of the above are true.
Q2) The economy starts out at a full-employment equilibrium.Some events then occur that generate a demand-pull inflation.
All of the following events except an increase in ________ might cause a demand-pull inflation.
A)the money wage rate
B)exports
C)the quantity of money
D)government expenditure
E)transfer payments
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Chapter 29: Fiscal Policy
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Sample Questions
Q1) If the economy has a structural deficit of $25 billion and a cyclical deficit of $75,we can conclude that the current budget deficit is ________ billion.
A)$25
B)$50
C)$75
D)$100
E)$125
Q2) 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.
Q3) The largest source of revenues for the federal government is A)transfer payments.
B)expenditures on goods and services.
C)personal income taxes.
D)corporate income taxes.
E)indirect taxes such as the GST.
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Page 31
Chapter 30: Monetary Policy
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88 Verified Questions
88 Flashcards
Source URL: https://quizplus.com/quiz/12224
Sample Questions
Q1) If the Bank of Canada buys government bonds,all of the following happens except A)bank reserves increase.
B)the quantity of money increases.
C)the supply of loanable funds increases.
D)the bank rate rises.
E)net exports increase.
Q2) As the sole issuer of Canadian money,the Bank of Canada can set any one of three variables:
A)the monetary base, the exchange rate, and the short-term interest rate.
B)the money base, the interest rate, and the unemployment rate.
C)the rate of inflation, the interest rate, and the unemployment rate.
D)the exchange rate, the interest rate, and the inflation rate.
E)the inflation rate, the unemployment rate, and the real economic growth rate.
Q3) When the Bank of Canada lowers the overnight loans rate,there is a ________ shift of the ________ curve.
A)rightward;AD
B)leftward;AD
C)rightward;SAS
D)leftward;SAS
E)rightward;LAS
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Chapter 31:International Trade Policy
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116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/12225
Sample Questions
Q1) ________ specifies the maximum amount of a good that may be imported in a given period of time.
A)An import restriction
B)A legislative restriction
C)A trade restriction
D)An import quota
E)An import subsidy
Q2) Refer to Figure 31.2.1,the tariff ________ Canada's imports of shirts by ________ million shirts per year.
A)decreases;16
B)decreases;8
C)increases;8
D)increases;4
E)increases;16
Q3) If Canada imposes a tariff on imported steel,the tariff
A)raises the Canadian price of imported steel.
B)decreases Canadian production of steel.
C)increases the total Canadian consumption of steel.
D)decreases employment in the Canadian steel industry.
E)both B and D are correct.
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