Social Science: Economics Test Preparation
Course Introduction
This course offers an in-depth introduction to the fundamental principles of economics within the context of social science. Students will explore the core concepts of microeconomics and macroeconomics, including supply and demand, market structures, production, consumption, and the allocation of resources. The course also examines broader socio-economic issues such as income distribution, labor markets, government policy, and globalization. Through practical examples and case studies, learners will understand how economic theories apply to real-world social challenges, equipping them with analytical tools to critically evaluate contemporary economic issues and policies.
Recommended Textbook
Economics Today The Macro View 5th Canadian Edition by Roger LeRoy Miller
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17 Chapters
2077 Verified Questions
2077 Flashcards
Source URL: https://quizplus.com/study-set/3706 Page 2
Chapter 1: The Nature of Economics
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171 Verified Questions
171 Flashcards
Source URL: https://quizplus.com/quiz/73781
Sample Questions
Q1) Whenever statements expressing value judgments are made,we enter the realm of A)normative economics.
B)macroeconomics.
C)microeconomics.
D)positive economics.
Answer: A
Q2) The income that is earned when capital is used to produce goods and services is ________.
Answer: interest.
Q3) The potential rewards available to an individual because a particular activity is undertaken are known as A)gifts.
B)incentives.
C)premiums.
D)intrinsic values.
Answer: B
Q4) Economists typically assume people act as if they are motivated by ________. Answer: self-interest.
Q5) Microeconomics concentrates on ________.
Answer: the behaviour of individual decision-makers.
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Chapter 2: Production Possibilities and Economic Systems
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) A society currently operating on its production possibilities curve is
A)technologically inefficient.
B)consuming too much output.
C)fully utilizing its productive resources.
D)under-utilizing its resources.
Answer: C
Q2) When a society forgoes current consumption to invest in the production of capital goods,
A)the less the society can consume in future.
B)the less capital the society can produce in the future.
C)the more the society can consume in the future.
D)the easier it will be for the society to consume less in the future because people will become accustomed to less.
Answer: C
Q3) Three Ps of capitalism are
A)prices,performance,and progress.
B)prices,privilege,and profits.
C)privilege,production,and profits.
D)prices,profits,and private property.
Answer: D
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Chapter 3: Demand and Supply
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177 Verified Questions
177 Flashcards
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Sample Questions
Q1) When the actual price is above the equilibrium price there will be
A)a shortage.
B)an incentive for consumers to increase their purchases.
C)excess supply.
D)neither an excess nor a shortage.
Answer: C
Q2) The relative price of a good is its price
A)expressed in constant 1990 dollars.
B)that is equal to the equilibrium price.
C)expressed in today's dollars.
D)expressed in terms of the price of another good.
Answer: D
Q3) A demand schedule holds
A)product price constant.
B)equilibrium constant.
C)product quantity constant.
D)product quality constant.
Answer: D
Q4) In Table 3-1,at a price of $8,market quantity demanded would be ________ units.
Answer: 44
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Chapter 4: Introduction to Macroeconomics
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) What are discouraged workers and how do they affect labour force participation and unemployment rates?
Q2) Most of the problems caused by inflation are caused by the fact that
A)there are no ways available for people to protect themselves against inflation.
B)anticipated inflation induces people to protect themselves against the inflation.
C)inflation causes the purchasing power of the dollar to increase.
D)the inflation is often unanticipated,and therefore comes as a surprise to individuals in the economy.
Q3) The long-run trend in business activity is
A)downward.
B)constant.
C)upward.
D)such that it cannot be described as a trend.
Q4) The unemployment rate will decrease when
A)the duration of unemployment increases.
B)the average work week falls from 40 to 39 hours.
C)the age of the labour force increases.
D)people get discouraged and quit looking for work.
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Chapter 5: Measuring the Economys Performance
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106 Verified Questions
106 Flashcards
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Sample Questions
Q1) Suppose the government changed the law so that the employer had to pay the entire amount of the social security tax.Furthermore,government interest payments increased and other changes in the law induced many sole proprietorships to incorporate.The net effect of these changes on gross domestic income would be
A)zero because none of the changes affect the measure of gross domestic income.
B)zero because the changes with positive effects exactly offset the changes with negative effects.
C)positive because of the change in interest payments.
D)positive because profits are part of gross domestic investment while proprietors' income is not;and the social security tax paid by employers is part of gross domestic income while the part paid by employees is not.
Q2) An example of an increase in gross private domestic investment spending that also increases GDP is when
A)a family sells its home because of a transfer.
B)a farmer buys a used tractor.
C)inventories of new cars accumulate on the lots of car dealers.
D)government increases spending on infrastructure.
Q3) How is interest measured when used in deriving GDP?
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Chapter 6: Modelling Real Gdp and the Price Level in the Long Run
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) The horizontal axis for an aggregate demand curve measures
A)quantity demanded of the representative good.
B)real GDP.
C)output of all goods and services measured as a quantity index.
D)disposable personal income.
Q2) Suppose a country has no trade with other countries and people can borrow as much money as they want at the current interest rate.A decrease in the price level will generate
A)an increase in quantity demanded because of the real-balance effect.
B)an increase in quantity demanded because of the open-economy effect and the indirect effect.
C)an increase in quantity demanded because the real-balance effect will be stronger than the indirect effect and the open-economy effect.
D)an increase in quantity demanded because the indirect effect will be stronger than the real-balance effect.
Q3) Is it possible for economic growth to be zero? If so,what would the sample long run growth path for real GDP look like?
Q4) What is the real-balance effect of an increase in the price level?
Q5) What information is provided by the aggregate demand curve?
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Chapter 7: Economic Growth and Development
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) Entrepreneurship functions better when
A)the government performs the entrepreneurial function.
B)there is a well-defined property rights system.
C)saving is relatively low.
D)most of the population has low levels of education.
Q2) Other things held constant,an increase in consumption spending implies
A)a decrease in saving.
B)a decrease in government spending.
C)a lower standard of living in the future.
D)economic growth is stagnant.
Q3) A small improvement in a country's growth rate is a benefit to policy makers because
A)a small change can have large effects on per capita GDP over time.
B)inflationary pressures will prove inconsequential.
C)policy makers focus too much on economic growth and not enough on increasing savings rates.
D)the larger GDP is the better the economic welfare will be in the future.
Q4) Why are economic growth and saving related?
Q5) Why might population growth and immigration stimulate economic growth?
Page 9
Q6) What is the human Development Index (HDI),and what does it measure?
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Chapter 8: Modelling Real Gdp and the Price Level in the Short Run
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115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/73788
Sample Questions
Q1) If our economy is growing at a constant rate of 5 percent per year,then over a period of 10 years we would expect to see which of the following?
A)Nice,steady flat line growth
B)An upward-sloping growth line
C)A downward-sloping growth line
D)It is impossible to say what kind of growth line we would see
Q2) An aggregate demand shock is generally referred to as
A)an unexpected event that causes the aggregate demand curve to shift inward or outward.
B)an expected event that causes the aggregate demand curve to shift inward or outward.
C)an unexpected event that causes the long-run aggregate supply curve to shift inward or outward.
D)an unexpected event that causes the short-run aggregate supply curve to shift inward or outward.
Q3) Explain in detail,with the aid of diagrams the two types of inflation tat exist in the short-run.
Q4) Explain what is meant by cost-push inflation?
Q5) Distinguish between the short-run and long-run aggregate supply curves.
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Chapter 9: Consumption, investment, and the Multiplier
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) If the MPS = 0.33,a $100 increase in net exports will
A)reduce national income by $100.
B)reduce national income by $300.
C)increase national income by $33.
D)increase national income by $300.
Q2) In Figure 9-2,when disposable income is greater than 600,then
A)savings are negative.
B)the MPC is greater than 1.
C)savings are positive.
D)the MPS is negative.
Q3) What is the multiplier? How is it calculated? Why is the multiplier related only to consumption spending?
Q4) In Figure 9-1,line ABC is called
A)the 45-degree line.
B)the consumption function.
C)the saving function.
D)aggregate supply.
Q5) What effect does a higher aggregate price level have on TPE and aggregate demand in regards to the open economy effect?
Q6) What are the simplifying assumptions that are made in the Keynesian Model?
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Chapter 10: The Public Sector
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) To protect the competitive economic system by restricting the formation of monopolies,the government has passed and enforced
A)anti-combines laws.
B)tort laws.
C)zoning laws.
D)regulatory laws.
Q2) An example of a transfer in kind is
A)national defense.
B)subsidized public housing.
C)Social Security.
D)employment benefits.
Q3) A family making $30,000 pays $4,500 in taxes and a family making $40,000 pays $6,000 in taxes.The tax system is ________.
Q4) Once produced,satellite signals can be consumed by more or fewer consumers without any change in cost.Discuss the problems this poses for having private markets produce the socially optimal quantity of satellite programming.
Q5) Suppose you purchased 100 shares of stock in 2000 for $20 a share,and the price now is $30 a share.Your capital gain,should you sell the stock,is $________.
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Chapter 11: Fiscal Policy and the Public Debt
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116 Verified Questions
116 Flashcards
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Sample Questions
Q1) Suppose the government believes the economy is operating beyond the full-employment real GDP.What kind of fiscal policy would it pursue? Would it matter if the belief was correct or not? How?
Q2) When national income falls,which of the following will automatically occur?
A)a decrease in tax rates
B)a decrease in tax revenues
C)a decrease in unemployment compensation expenditures
D)an increase in tax revenues
Q3) To close a recessionary gap through fiscal policy,the government should
A)decrease government spending in order to increase aggregate supply.
B)increase government spending in order to increase aggregate demand.
C)reduce taxes in order to stimulate investment,and thus increase aggregate supply.
D)increase government spending and taxes in order to both increase aggregate demand and aggregate supply.
Q4) Suppose the economy is currently in short-run and long-run equilibrium.Describe the process of how the government "crowds out" private investment even further than if in a recession.
Q5) List and describe in detail the 5 possible offsets to fiscal policy.
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Chapter 12: Money and the Banking System
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) The amount of money in circulation is referred to as A)seignorage.
B)fiat money
C)the money supply
D)reserves.
Q2) Describe the functions of money and provide an example of how each can be applied to money as we use it,as well as a non-money item such as a bank card or debit card (that makes it not money).
Q3) M2 plus deposits held at near banks such as trust companies and credit unions are referred to as .
A)savings deposits and non-personal notice deposits.
B)M1 plus M2..
C)M1+.
D)M2+.
Q4) Which of the following is an example of M2+ money?
A)a credit card
B)savings deposits
C)coins
D)chequing accounts
Q5) Are credit cards considered money?
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Chapter 13: Money Creation and Deposit Insurance
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) The actual money multiplier is less than the potential money multiplier because
A)some banks may decide to keep excess reserves.
B)some loans may earn more interest than others.
C)banks keep some of their required reserves as vault cash.
D)banks keep some of their reserves as government securities.
Q2) Changes in the money supply are important because
A)there is a relationship between changes in the money supply and changes in government spending.
B)there is a relationship between changes in the money supply and changes in nominal GDP.
C)there is an inverse relationship between changes in the money supply and the inflation rate.
D)there is a direct relationship between changes in the money supply and changes in interest rates.
Q3) Under a system of fractional reserve banking,the desired reserve ratio is the ratio of A)assets to net worth.
B)desired reserves to total chequable deposits.
C)desired reserves to net worth.
D)excess reserves to desired reserves.
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Page 15
Chapter 14: The Bank of Canada and Monetary Policy
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) When the Bank of Canada sells a government security to a commercial bank,
A)the cash reserves of the commercial bank decrease.
B)the net worth of the commercial bank increases.
C)the loans of the commercial bank will increase.
D)the balance sheet of the commercial bank is thrown off balance.
Q2) Suppose that the nominal money supply (M)is $200 million and the value of aggregate output (PQ)is $1 billion.It must be the case that
A)the economy is suffering from inflation.
B)the average price paid for a "typical" good is $5.
C)there will be a shortage of money balances in the economy.
D)the income velocity of money is 5.
Q3) If the commercial banking system's excess reserves are zero and the reserve requirement is 10 percent,in order for the banking system to increase deposits by $2.5 million,the Bank of Canada must
A)permit the system to have prolonged reserve deficiencies.
B)sell $2.5 million of government securities to the general public.
C)sell $250,000 of government securities to the general public.
D)buy $250,000 of government securities from the public.
Q4) What are the functions of the Bank of Canada?
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Chapter 15: Issues in Stabilization Policy
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) According to the work of Phillips,what Type of relationship was believed to exist between unemployment and inflation?
Q2) A reduction in world oil supplies is likely to cause
A)an increase in aggregate demand and a decrease in the equilibrium price level.
B)a decrease in equilibrium price level and an increase in real GDP.
C)an increase in equilibrium price level and an increase in real GDP.
D)a reduction in aggregate supply,a rise in the equilibrium price level,and a fall in real GDP.
Q3) In the short run,unanticipated inflation typically leads to
A)higher rates of unemployment.
B)decreases in aggregate demand.
C)lower rates of unemployment.
D)workers' thinking the real wage has been reduced.
Q4) According to the new classical economists and the policy irrelevance proposition,real GDP is determined by
A)the economy's aggregate demand curve.
B)the economy's long-run aggregate supply curve.
C)the rate of inflation only.
D)a combination of fiscal policy and monetary policy.
Q5) Explain what the Phillips curve is and how it is used in practical applications.
Page 17
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Chapter 16: Comparative Advantage and the Open Economy
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92 Verified Questions
92 Flashcards
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Sample Questions
Q1) A difference between a quota and a tariff is that
A)a tariff generates a higher price than a quota does.
B)a tariff generates a greater reduction in exports.
C)a quota increases profits of domestic producers more than a tariff does.
D)the government collects revenues from a tariff,which does not happen with a quota.
Q2) In France 1 unit of labour can produce 3 units of wheat or 5 units of wine;in Germany 1 unit of labour can produce 4 units of wheat or 10 units of wine,it is correct to state that
A)Germany has an absolute advantage in producing both wheat and wine.
B)Germany has a comparative advantage in producing wheat.
C)France has a comparative advantage in producing wine.
D)All of these are correct.
Q3) One economic truism is that any nation's restriction of imports ultimately leads to A)a increase in exports.
B)a reduction in exports.
C)an economic upswing.
D)an increase in GDP.
Q4) What are the effects of a tariff on a good?
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Chapter 17: Exchange Rates and the Balance of Payments
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) Crawling peg is
A)managed flexible exchange rate.
B)a shock absorber.
C)hedge against foreign exchange risk.
D)an exchange rate arrangement in which a country pegs the value of its currency to the exchange value of another nation's currency but allows the par value to change at regular intervals.
Q2) An increase in a country's rate of inflation is apt to
A)reduce its imports and improve its trade balance.
B)lower its nominal rate of interest and encourage an inflow of capital.
C)worsen its balance of trade and payments.
D)decrease demand for the country's currency.
Q3) When the dollar price of a euro is $0.50,it is correct to state that a Canadian traveling in Europe will receive ________ euros per dollar.
A)2
B)4
C)5
D)20
Q4) Define the three categories of balance of payments transactions.
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