Mega Deck

Question 2

B

Answer 2

Other things being equal, a rise in the domestic price level

Question 3

B

Answer 3

Other things being equal, a fall in the domestic price level

Question 4

D

Answer 4

Other things being equal, an exogenous rise in the domestic

Question 5

B

Answer 5

Other things being equal, when the domestic price level fall

Question 6

A

Answer 6

Other things being equal, when the domestic price level rise

Question 7

B

Answer 7

Consider a simple macro model with a given price level and d

Question 8

C

Answer 8

Other things being equal, when the price level rises, the re

Question 9

B

Answer 9

An exogenous fall in the domestic price level causes an incr

Question 10

D

Answer 10

Consider a simple macro-model with demand-determined output.

Question 11

C

Answer 11

Consider a simple macro model with demand-determined output.

Question 12

E

Answer 12

Consider a simple macro model with demand-determined output.

Question 13

A

Answer 13

Suppose there is an exogenous increase in the domestic price

Question 14

A

Answer 14

Other things being equal, a rise in the price level will imp

Question 15

C

Answer 15

Other things being equal, an exogenous increase in the price

Question 16

E

Answer 16

Which of the following events would cause the AE function to

Question 17

A

Answer 17

Other things being equal, as the price level rises exogenous

Question 18

D

Answer 18

Other things being equal, as the price level falls exogenous

Question 19

C

Answer 19

The AD curve relates the price level to which of the followi

Question 20

B

Answer 20

All points on an economys AD curveA) correspond to a partic

Question 21

D

Answer 21

In a macro model with a constant price level, an increase in

Question 22

E

Answer 22

In a macro model with a constant price level, an increase in

Question 23

A

Answer 23

On a graph that shows the derivation of the AD curve, an exo

Question 24

A

Answer 24

Which of the following would likely cause an upward parallel

Question 25

E

Answer 25

Which of the following would likely cause a downward shift i

Question 26

B

Answer 26

Which of the following would likely cause a downward paralle

Question 27

B

Answer 27

Refer to Figure 23-1. Assume the economy is initially in equ

Question 28

D

Answer 28

Refer to Figure 23-1. Assume the economy is initially in equ

Question 29

C

Answer 29

Refer to Figure 23-1. Assume the economy is initially in equ

Question 30

E

Answer 30

Refer to Figure 23-1. Assume the economy is initially in equ

Question 31

A

Answer 31

Refer to Figure 23-1. Assume the economy is initially in equ

Question 32

D

Answer 32

Refer to Figure 23-1. Assume the economy is initially in equ

Question 33

A

Answer 33

Refer to Figure 23-1. Assume the economy is initially in equ

Question 34

C

Answer 34

Refer to Figure 23-1. Assume the economy is initially in equ

Question 35

D

Answer 35

Consider a simple macro model with a given price level and d

Question 36

B

Answer 36

Consider the relationship between the AE curve and the AD cu

Question 37

A

Answer 37

Consider the relationship between the AE curve and the AD cu

Question 38

A

Answer 38

A leftward shift of the aggregate demand (AD) curve could re

Question 39

E

Answer 39

A leftward shift in the aggregate demand (AD) curve could re

Question 40

D

Answer 40

A leftward shift of the aggregate demand (AD) curve could re

Question 41

B

Answer 41

A rightward shift in the aggregate demand (AD) curve could r

Question 42

C

Answer 42

Consider the basic AD/AS macro model. The simple multiplier

Question 43

C

Answer 43

Consider the basic AD/AS model in the short run. When there

Question 44

B

Answer 44

One of the reasons why the aggregate demand (AD) curve slope

Question 45

B

Answer 45

One of the reasons why the aggregate demand (AD) curve slope

Question 46

A

Answer 46

The AD curve shows the relationship betweenA) the price leve

Question 47

B

Answer 47

Consider the relationship between the AE curve and the AD cu

Question 48

B

Answer 48

Consider the relationship between the AE curve and the AD cu

Question 49

D

Answer 49

Consider the AD/AS model. Suppose there is an increase in au

Question 50

A

Answer 50

Other things being equal, a higher marginal propensity to sp

Question 51

B

Answer 51

Other things being equal, a closed economy will have a _____

Question 52

A

Answer 52

Other things being equal, an economy with a higher net tax r

Question 53

A

Answer 53

Consider two economies, A and B. Economy A has a marginal pr

Question 54

B

Answer 54

Consider two economies, A and B. Economy A has a marginal pr

Question 55

C

Answer 55

Consider two economies, A and B. Economy A has a marginal pr

Question 56

B

Answer 56

Consider two economies, A and B. Economy A has a marginal pr

Question 57

D

Answer 57

Consider two economies, A and B. Economy A has a marginal pr

Question 58

D

Answer 58

Consider the simple multiplier when the price level is const

Question 59

E

Answer 59

Aggregate supply refers to theA) decisions of firms to decre

Question 60

D

Answer 60

The economys aggregate supply (AS) curve shows the relation

Question 61

C

Answer 61

The economys aggregate supply (AS) curve shows the relation

Question 62

C

Answer 62

The aggregate supply (AS) curve is drawn with which variable

Question 63

A

Answer 63

The aggregate supply curve relates the price level to the qu

Question 64

B

Answer 64

In the short run, the aggregate supply curve has a positive

Question 65

E

Answer 65

In building a macro model with an AS curve, it is assumed th

Question 66

C

Answer 66

The economys aggregate supply (AS) curve is assumed to slop

Question 67

D

Answer 67

The economys aggregate supply curve is drawn under two main

Question 68

A

Answer 68

A decrease in aggregate supply in the short run is A) shown

Question 69

C

Answer 69

A decrease in aggregate supply in the short run isA) reflect

Question 70

D

Answer 70

Consider the basic AD/AS model. If there is a decrease in th

Question 71

D

Answer 71

Consider the basic AD/AS model. If major labour unions succe

Question 72

C

Answer 72

A movement along the economys AS curve could be caused by a

Question 73

E

Answer 73

The economys AS curve will shift upward in the short run if

Question 74

A

Answer 74

Other things being equal, the economys AS curve will shift

Question 75

B

Answer 75

Other things being equal, the economys AS curve will shift

Question 76

B

Answer 76

A rightward shift in the economys AS curve implies thatA) a

Question 77

A

Answer 77

A leftward shift in the economys AS curve implies thatA) at

Question 78

C

Answer 78

The economys AS curve is often assumed to be relatively fla

Question 79

C

Answer 79

Consider the economys aggregate supply curve. Other things

Question 80

E

Answer 80

Consider the economys aggregate supply curve. Other things

Question 81

B

Answer 81

Consider the basic AD/AS model. When wage rates rise faster

Question 82

D

Answer 82

Suppose there is a drop in the price of an important factor

Question 83

C

Answer 83

Consider the basic AD/AS model. Suppose that a rising percen

Question 84

B

Answer 84

Consider the basic AD/AS model. Suppose that high-school gra

Question 85

E

Answer 85

Consider the basic AD/AS model. If their unit costs rise as

Question 86

D

Answer 86

The aggregate supply curve will shift as a result of a chang

Question 87

C

Answer 87

The aggregate supply curve tends to be relatively steep when

Question 88

C

Answer 88

The aggregate supply curve is usually assumed to get progres

Question 89

D

Answer 89

Consider the basic AD/AS model. If firms unit costs remaine

Question 90

C

Answer 90

The concept of demand-determined output requires ________

Question 91

B

Answer 91

Refer to Figure 23-2. Which of the following events could ca

Question 92

E

Answer 92

Refer to Figure 23-2. Which of the following events could ca

Question 93

C

Answer 93

Refer to Figure 23-2. The shift from to shown in the dia

Question 94

C

Answer 94

Macroeconomic equilibrium is described as the combination of

Question 95

B

Answer 95

Consider the nature of macroeconomic equilibrium. If, at a p

Question 96

B

Answer 96

Consider the nature of macroeconomic equilibrium. If, at a p

Question 97

A

Answer 97

If the AS curve is vertical and there is a decrease in aggre

Question 98

B

Answer 98

Consider the AD/AS model. An increase in government purchase

Question 99

D

Answer 99

Consider the basic AD/AS model. Real GDP is demand determine

Question 100

B

Answer 100

Over the horizontal range of the economys AS curve (assumin

Question 101

E

Answer 101

If the economys AS curve is upward sloping, a negative shoc

Question 102

E

Answer 102

Which of the following will cause a negative aggregate deman

Question 103

C

Answer 103

Refer to Figure 23-3. Which of the following statements best

Question 104

D

Answer 104

Refer to Figure 23-3. Which of the following statements best

Question 105

C

Answer 105

Refer to Figure 23-3. Suppose the price level in Economy A i

Question 106

C

Answer 106

Aggregate demand shocks have a large effect on real GDP and

Question 107

C

Answer 107

If the economys AS curve is upward sloping, a positive aggr

Question 108

B

Answer 108

Consider the basic AD/AS model with an upward-sloping AS cur

Question 109

C

Answer 109

) If the economys AS curve is very steep and there is a neg

Question 110

B

Answer 110

Consider the basic AD/AS model. Suppose firms are currently

Question 111

A

Answer 111

Suppose firms are currently producing output at a level beyo

Question 112

E

Answer 112

In the basic AD/AS model, the effect of an aggregate demand

Question 113

A

Answer 113

Which of the following would cause a positive aggregate dema

Question 114

C

Answer 114

If the economy is in macroeconomic equilibrium with a vertic

Question 115

E

Answer 115

If the economy is in macroeconomic equilibrium with a vertic

Question 116

A

Answer 116

Aggregate demand (AD) shocks have a smaller effect on real G

Question 117

D

Answer 117

Which of the following represents a positive aggregate suppl

Question 118

D

Answer 118

Which of the following will cause a positive aggregate suppl

Question 119

D

Answer 119

Aggregate supply shocks cause the price level and real GDP t

Question 120

E

Answer 120

Consider the basic AD/AS macro model. A rise in an input pri

Question 121

B

Answer 121

Consider the basic AD/AS model. A rise in an input price lik

Question 122

D

Answer 122

Consider the AD/AS macro model. Suppose there is an increase

Question 123

E

Answer 123

Consider the AD/AS model. Suppose there is a decrease in agg

Question 124

E

Answer 124

Consider the following news headline: World commodity price

Question 125

B

Answer 125

Consider the following news headline: Governments plan mass

Question 126

D

Answer 126

Consider the following news headline: Information technolog

Question 127

A

Answer 127

Consider the following news headline: Threat of widespread

Question 128

E

Answer 128

Consider the following two headlines appearing in the same d

Question 129

C

Answer 129

Suppose the economy is hit by a shock and we observe that th

Question 130

E

Answer 130

Refer to Figure 23-4. Suppose the Canadian economy is initia

Question 131

B

Answer 131

If the economys AS curve is completely horizontal, the mult

Question 132

D

Answer 132

When the economys AS curve is positively sloped, the multip

Question 133

D

Answer 133

If the economys AS curve is vertical, the multiplier in the

Question 134

A

Answer 134

Suppose the government embarks on an infrastructure program,

Question 135

B

Answer 135

Consider the AD/AS model in which the price level varies. In

Question 136

C

Answer 136

Refer to Figure 23-5. Suppose that an increase in government

Question 137

B

Answer 137

Refer to Figure 23-5. Suppose that an increase in government

Question 138

A

Answer 138

Refer to Figure 23-5. Suppose that an increase in government

Question 139

D

Answer 139

Refer to Figure 23-5. Suppose that an increase in autonomous

Question 140

C

Answer 140

Refer to Figure 23-5. Suppose that an increase in autonomous

Question 141

B

Answer 141

Refer to Figure 23-5. Suppose that an increase in autonomous

Question 142

E

Answer 142

49) Refer to Figure 23-3. Which of the two economies, A or B

Question 143

B

Answer 143

Refer to Figure 23-3. Which of the following statements corr

Question 144

C

Answer 144

Which of the following are the defining assumptions of the s

Question 145

D

Answer 145

Which of the following are the defining assumptions of the l

Question 146

D

Answer 146

In macroeconomic analysis, the assumption that potential out

Question 147

D

Answer 147

Which of the following is a defining assumption of the AD/AS

Question 148

D

Answer 148

In the basic AD/AS model, which of the following is a defini

Question 149

E

Answer 149

Which of the following is a defining assumption of the AD/AS

Question 150

D

Answer 150

When we study the adjustment process in macroeconomics, what

Question 151

C

Answer 151

When we study the adjustment process in macroeconomics, we a

Question 152

A

Answer 152

The economys output gap is defined as theA) difference betw

Question 153

A

Answer 153

Which of the following best describes the concept of potenti

Question 154

A

Answer 154

An inflationary output gap occurs whenA) actual GDP exceeds

Question 155

C

Answer 155

An inflationary output gap implies thatA) the demand for all

Question 156

A

Answer 156

A recessionary output gap implies that A) the demand for all

Question 157

B

Answer 157

An inflationary output gap would generate which of the follo

Question 158

D

Answer 158

An inflationary output gap is characterized byA) falling pri

Question 159

E

Answer 159

A recessionary output gap is characterized byA) rising price

Question 160

D

Answer 160

Which of the following will occur as part of the automatic a

Question 161

E

Answer 161

Which of the following would occur as part of the automatic

Question 162

B

Answer 162

If the short-run macroeconomic equilibrium occurs with real

Question 163

C

Answer 163

If the short-run macroeconomic equilibrium occurs with real

Question 164

C

Answer 164

If wages rise faster than increases in labour productivity,

Question 165

A

Answer 165

A common assumption among macroeconomists is that when real

Question 166

B

Answer 166

A common assumption among macroeconomists is that when real

Question 167

C

Answer 167

If the economy is experiencing an inflationary output gap, t

Question 168

D

Answer 168

If an economy is experiencing neither a recessionary gap nor

Question 169

A

Answer 169

Refer to Figure 24-1. If the economy is currently in a short

Question 170

A

Answer 170

Refer to Figure 24-1. If the economy is currently producing

Question 171

B

Answer 171

Refer to Figure 24-1. If the economy is currently producing

Question 172

D

Answer 172

Refer to Figure 24-2. If the economy is currently in a short

Question 173

A

Answer 173

Refer to Figure 24-2. Suppose the economy is in equilibrium

Question 174

C

Answer 174

The Phillips curve describes the relationship betweenA) aggr

Question 175

D

Answer 175

The Phillips curve provides a theoretical link betweenA) the

Question 176

C

Answer 176

Which of the following describes the distinction between the

Question 177

C

Answer 177

If the economy in the short run is experiencing a recessiona

Question 178

E

Answer 178

Which of the following statements about output gaps is true?

Question 179

B

Answer 179

Consider the basic AD/AS diagram. The vertical line at Y* sh

Question 180

A

Answer 180

As the macro economy adjusts from the short run to the long

Question 181

B

Answer 181

Following any AD or AS shock, economists typically assume th

Question 182

C

Answer 182

Refer to Table 24-1. Which of the economies is operating at

Question 183

D

Answer 183

Refer to Table 24-1. Which of the economies are experiencing

Question 184

C

Answer 184

Refer to Table 24-1. Which of the following statements best

Question 185

C

Answer 185

Refer to Table 24-1. Consider Economy E. Which of the follow

Question 186

D

Answer 186

Refer to Table 24-1. How is the adjustment asymmetry demonst

Question 187

B

Answer 187

Refer to Table 24-1. Which of the following statements expla

Question 188

A

Answer 188

Refer to Table 24-1. In which economy is there the most unus

Question 189

D

Answer 189

Suppose the economy is initially in a long-run macroeconomic

Question 190

C

Answer 190

Suppose that the economy is initially in a long-run macroeco

Question 191

A

Answer 191

Suppose that the economy is initially in a long-run macroeco

Question 192

B

Answer 192

Suppose that the economy is initially in a long-run macroeco

Question 193

D

Answer 193

Suppose the following conditions are present in the economy:

Question 194

C

Answer 194

Suppose the following conditions are present in the economy:

Question 195

C

Answer 195

Consider the AD/AS macro model. An important asymmetry in th

Question 196

E

Answer 196

Consider the AD/AS macro model. The wage-adjustment process

Question 197

E

Answer 197

Consider the AD/AS macro model. An important asymmetry in th

Question 198

B

Answer 198

An economy may not quickly and automatically eliminate a rec

Question 199

C

Answer 199

An adjustment asymmetry in aggregate supply is A) the conc

Question 200

C

Answer 200

Consider the AD/AS macro model. A permanent demand shock tha

Question 201

C

Answer 201

Consider an AD/AS model in long-run equilibrium. An output g

Question 202

C

Answer 202

Consider an economy with a relatively steep AS curve. If the

Question 203

E

Answer 203

Consider an economy with a relatively steep AS curve. If the

Question 204

C

Answer 204

Suppose Canadas economy is in a long-run equilibrium with r

Question 205

A

Answer 205

Suppose Canadas economy is in a long-run equilibrium with r

Question 206

E

Answer 206

Consider the basic AD/AS macro model in long-run equilibrium

Question 207

A

Answer 207

Consider the basic AD/AS macro model in long-run equilibrium

Question 208

C

Answer 208

Consider the basic AD/AS macro model in long-run equilibrium

Question 209

E

Answer 209

Suppose Canadas economy is in a long-run equilibrium with r

Question 210

D

Answer 210

Suppose Canadas economy is in a long-run equilibrium with r

Question 211

A

Answer 211

Refer to Figure 24-3. A negative shock to the economy shifts

Question 212

A

Answer 212

Refer to Figure 24-3. A negative shock to the economy shifts

Question 213

D

Answer 213

Refer to Figure 24-3. Which of the following events could ha

Question 214

B

Answer 214

Refer to Figure 24-3. After the negative aggregate demand sh

Question 215

B

Answer 215

Refer to Figure 24-3. Following the negative AD shock shown

Question 216

C

Answer 216

Consider the AD/AS model, and suppose that the economy begin

Question 217

A

Answer 217

Consider the AD/AS model and suppose the economy begins at p

Question 218

A

Answer 218

What is meant by the term stagflation?A) the combination o

Question 219

D

Answer 219

In the basic AD/AS macro model, which of the following event

Question 220

D

Answer 220

In the basic AD/AS macro model, which of the following event

Question 221

C

Answer 221

Consider the basic AD/AS macro model in long-run equilibrium

Question 222

C

Answer 222

Refer to Figure 24-4. The initial effect of the positive AS

Question 223

D

Answer 223

Refer to Figure 24-4. The positive aggregate supply shock sh

Question 224

E

Answer 224

Refer to Figure 24-4. After the positive aggregate supply sh

Question 225

E

Answer 225

Refer to Figure 24-4. Following the positive AS shock shown

Question 226

C

Answer 226

Consider the basic AD/AS macro model, initially in a long-ru

Question 227

E

Answer 227

The curve that is sometimes called the long-run aggregate s

Question 228

A

Answer 228

What economists sometimes call the long-run aggregate suppl

Question 229

B

Answer 229

What is sometimes called the long-run aggregate supply curv

Question 230

C

Answer 230

The long-run aggregate supply curve, vertical at Y*, shows

Question 231

D

Answer 231

Consider the AD/AS model. In the long run, after factor pric

Question 232

A

Answer 232

Consider the AD/AS model. Since output in the long run is de

Question 233

D

Answer 233

Consider the AD/AS model after factor prices have fully adju

Question 234

D

Answer 234

Consider the AD/AS model after factor prices have fully adju

Question 235

C

Answer 235

Refer to Figure 24-5. The economy is not in long-run equilib

Question 236

E

Answer 236

Refer to Figure 24-5. Following a positive demand shock that

Question 237

C

Answer 237

Refer to Figure 24-5. If the economy is currently in equilib

Question 238

B

Answer 238

Consider the AD/AS macro model. The study of short-run cycli

Question 239

C

Answer 239

In the long run in the AD/AS macro model we can say thatA) b

Question 240

C

Answer 240

Suppose the economy begins in a long-run equilibrium with Y

Question 241

D

Answer 241

Consider the AD/AS macro model. The main source of increases

Question 242

A

Answer 242

In the basic AD/AS macro model, permanent increases in real

Question 243

C

Answer 243

The study of the long run in macroeconomics focuses A) on ch

Question 244

C

Answer 244

When an economy experiences sustained growth in real GDP,A)

Question 245

A

Answer 245

Which of the following provides the best explanation for why

Question 246

E

Answer 246

Refer to Figure 24-1. If the economy is currently producing

Question 247

D

Answer 247

Refer to Figure 24-1. Suppose the economy is currently in a

Question 248

B

Answer 248

Refer to Figure 24-2. Suppose the economy is in a short-run

Question 249

A

Answer 249

Refer to Figure 24-2. Suppose the economy is in a short-run

Question 250

E

Answer 250

Refer to Figure 24-2. Suppose the economy is in a short-run

Question 251

D

Answer 251

One advantage of using expansionary fiscal policy rather tha

Question 252

D

Answer 252

Consider the basic AD/AS model, and suppose there is a negat

Question 253

A

Answer 253

Consider the basic AD/AS model, and suppose there is a negat

Question 254

E

Answer 254

Suppose the economy has a high level of unemployment and a l

Question 255

D

Answer 255

) Refer to Figure 24-6. If the government takes no action to

Question 256

B

Answer 256

Refer to Figure 24-6. The government could close the existin

Question 257

D

Answer 257

Consider Figure 24-7. At the initial short-run equilibrium,

Question 258

C

Answer 258

Refer to Figure 24-7. If the government takes no action to c

Question 259

A

Answer 259

Refer to Figure 24-7. The government could close the existin

Question 260

A

Answer 260

Suppose the economy is experiencing an inflationary gap in t

Question 261

D

Answer 261

As a global recession began in late 2008, the governments of

Question 262

B

Answer 262

Consider the global recession that began in late 2008. In te

Question 263

A

Answer 263

Income taxes in Canada can be considered to be automatic sta

Question 264

D

Answer 264

An important automatic fiscal stabilizer in Canada is A) the

Question 265

E

Answer 265

Automatic fiscal stabilizers are most helpful inA) making di

Question 266

C

Answer 266

Automatic fiscal stabilization in the economy refers toA) t

Question 267

D

Answer 267

Net tax revenues that rise with national income act as an au

Question 268

E

Answer 268

Consider the simplest macro model with demand-determined out

Question 269

C

Answer 269

Consider a simple macro model with demand-determined output.

Question 270

E

Answer 270

Consider a simple macro model with demand-determined output.

Question 271

C

Answer 271

Automatic fiscal stabilizers ________ the impact of demand o

Question 272

E

Answer 272

Suppose the government implements a permanent reduction in t

Question 273

C

Answer 273

The paradox of thrift refers to the understandable tendenc

Question 274

B

Answer 274

In the long run, aggregate demand is ________ for determinin

Question 275

D

Answer 275

The paradox of thrift does not exist in the long run because

Question 276

B

Answer 276

In the basic AD/AS macro model, the paradox of thrift is o

Question 277

E

Answer 277

Many economists think discretionary fiscal policy is of limi

Question 278

B

Answer 278

Given current limitations, fiscal policy as a macroeconomic

Question 279

D

Answer 279

Suppose the economy is experiencing a significant recessiona

Question 280

A

Answer 280

Which of the following statements about fiscal policy is the

Question 281

B

Answer 281

Which of the following statements about fiscal policy is the

Question 282

E

Answer 282

Suppose the government had made a decision to change fiscal

Question 283

E

Answer 283

An expansionary fiscal policy that takes the form of an incr

Question 284

A

Answer 284

Suppose the economy is in macroeconomic equilibrium with rea

Question 285

E

Answer 285

In any decision about stimulating the economy with a fiscal

Question 286

C

Answer 286

The growth rate of potential output might be decreased by an

Question 287

B

Answer 287

A reduction in the net tax rate might lead to an increase in

Question 288

C

Answer 288

The use of government purchases (G) as a fiscal policy tool

Question 289

D

Answer 289

In our macro model, the level of aggregate output is determi

Question 290

E

Answer 290

Fiscal policies typically affect the short-run level of GDP

Question 291

D

Answer 291

Over a long period of time, perhaps many years, changes in r

Question 292

D

Answer 292

Between the years 1960 and 2014, the Canadian economy experi

Question 293

C

Answer 293

In the long run, changes in average material living standard

Question 294

B

Answer 294

The compounding of economic growth rates means thatA) a larg

Question 295

A

Answer 295

If per capita GDP in a richer country grows at a faster annu

Question 296

C

Answer 296

If GDP in a richer country grows at the same annual rate as

Question 297

D

Answer 297

A common measure of a countrys level of productivity is A)

Question 298

D

Answer 298

A common measure of a countrys rate of economic growth is A

Question 299

A

Answer 299

Over the long term, by far the most potent force for raising

Question 300

D

Answer 300

If real income grows at approximately 2% per year, the numbe

Question 301

C

Answer 301

If real income grows at approximately 4% per year, the numbe

Question 302

C

Answer 302

Of the variables listed below, the best measure of a nation

Question 303

E

Answer 303

The theory of economic growth concentrates on the ________ o

Question 304

A

Answer 304

Which of the following is the best example of the acquisitio

Question 305

D

Answer 305

The four major determinants of economic growth include all o

Question 306

C

Answer 306

Refer to Table 25-1. If this economy is growing at an annual

Question 307

D

Answer 307

Refer to Table 25-1. If this economy is growing at an annual

Question 308

C

Answer 308

Refer to Table 25-1. What is real GDP in this economy in Yea

Question 309

A

Answer 309

Refer to Table 25-1. What is real GDP in this economy in Yea

Question 310

E

Answer 310

Refer to Figure 25-1. Which of the following statements best

Question 311

C

Answer 311

Refer to Figure 25-1. Which of the following statements abou

Question 312

D

Answer 312

Refer to Figure 25-1. The area marked Area 1 representsA) th

Question 313

B

Answer 313

Refer to Figure 25-1. Suppose Economy A jumps to the path of

Question 314

A

Answer 314

Refer to Figure 25-1. Which of the following costs of econom

Question 315

A

Answer 315

If a country transfers resources from the production of cons

Question 316

C

Answer 316

One of the benefits of long-run economic growth is A) growth

Question 317

B

Answer 317

The costs of long-run economic growth include: 1) declining

Question 318

B

Answer 318

For a given level of technology, a more rapid rate of econom

Question 319

D

Answer 319

The costs of economic growth include A) declining future liv

Question 320

B

Answer 320

Long-run economic growth can help alleviate the problems of

Question 321

C

Answer 321

Long-term economic growthA) is achieved only by changes in f

Question 322

A

Answer 322

Consuming fewer goods today in order to invest resources in

Question 323

D

Answer 323

Alleviation of poverty is more achievable in a growing econo

Question 324

E

Answer 324

An important social cost of economic growth is A) the increa

Question 325

D

Answer 325

Economic growth is often associated with structural change i

Question 326

B

Answer 326

Consider the long-run theory of investment, saving and growt

Question 327

B

Answer 327

If government policies are to be successful in enhancing a c

Question 328

B

Answer 328

Consider a closed economy with real GDP in the long run of $

Question 329

A

Answer 329

Which of the following equations is a correct expression for

Question 330

D

Answer 330

Refer to Table 25-2. What is the level of private saving for

Question 331

B

Answer 331

Refer to Table 25-2. What is the level of public saving for

Question 332

E

Answer 332

Refer to Table 25-2. What is the level of national saving fo

Question 333

C

Answer 333

Refer to Table 25-3. What is the level of private saving for

Question 334

A

Answer 334

Refer to Table 25-3. What is the level of public saving for

Question 335

E

Answer 335

Refer to Table 25-3. What is the level of national saving fo

Question 336

D

Answer 336

Refer to Table 25-3. What is the level of combined budget su

Question 337

D

Answer 337

Suppose the government has a budget deficit of $400. If the

Question 338

E

Answer 338

Suppose the government has a budget surplus of $2 billion. I

Question 339

A

Answer 339

Consider the long-run theory of investment, saving, and grow

Question 340

E

Answer 340

For a given level of national income, an increase in private

Question 341

B

Answer 341

An increase in the government budget surplus, everything els

Question 342

E

Answer 342

Consider a closed economy in the long run. A country with a

Question 343

B

Answer 343

Consider the market for financial capital for a closed econo

Question 344

E

Answer 344

Which of the following statements concerning national saving

Question 345

A

Answer 345

For a given level of national income, a decrease in governme

Question 346

D

Answer 346

Consider the long-run theory of investment, saving, and grow

Question 347

E

Answer 347

Consider the long-run theory of investment, saving and growt

Question 348

D

Answer 348

Consider the market for financial capital in the long run. T

Question 349

B

Answer 349

Consider the market for financial capital in the long run. T

Question 350

C

Answer 350

Refer to Figure 25-2. Suppose national saving is reflected b

Question 351

A

Answer 351

Refer to Figure 25-2. Suppose national saving is reflected b

Question 352

B

Answer 352

Refer to Figure 25-2. Suppose national saving is reflected b

Question 353

A

Answer 353

Refer to Figure 25-2. Suppose national saving is reflected b

Question 354

E

Answer 354

Refer to Figure 25-2. Suppose national saving is reflected b

Question 355

C

Answer 355

Refer to Figure 25-2. Suppose national saving is reflected b

Question 356

D

Answer 356

Refer to Figure 25-3. Suppose the interest rate in this mark

Question 357

C

Answer 357

Refer to Figure 25-3. The equilibrium interest rate in this

Question 358

A

Answer 358

Refer to Figure 25-3. Suppose the interest rate in this mark

Question 359

D

Answer 359

) In the long run, an increase in the demand for investment

Question 360

C

Answer 360

Data from most industrialized countries show that countries

Question 361

C

Answer 361

Consider the Neoclassical growth model. The effect of an inc

Question 362

C

Answer 362

One important assumption of the Neoclassical growth model is

Question 363

B

Answer 363

The main properties of a Neoclassical aggregate production f

Question 364

B

Answer 364

The Neoclassical growth model assumes that, with a given sta

Question 365

B

Answer 365

The Neoclassical growth model assumes that, with a given sta

Question 366

C

Answer 366

A central assumption of the Neoclassical growth model is tha

Question 367

C

Answer 367

In the Neoclassical growth model, whenever diminishing retur

Question 368

B

Answer 368

In the Neoclassical growth model, decreases in the populatio

Question 369

D

Answer 369

In the Neoclassical growth model, increases in the stock of

Question 370

B

Answer 370

In the Neoclassical growth model, if capital and labour grow

Question 371

C

Answer 371

According to the Neoclassical growth model, it is most likel

Question 372

C

Answer 372

In Neoclassical growth theory, an increase in the labour for

Question 373

B

Answer 373

In Neoclassical growth theory, average material living stand

Question 374

A

Answer 374

In Neoclassical growth theory, increasing the amount of capi

Question 375

E

Answer 375

The Neoclassical theory of economic growth led economics to

Question 376

C

Answer 376

In the Neoclassical growth model, the law of diminishing mar

Question 377

C

Answer 377

According to the Neoclassical growth model, which of the fol

Question 378

C

Answer 378

According to the Neoclassical growth model, which of the fol

Question 379

C

Answer 379

Real GDP is not a good measure of average material living st

Question 380

B

Answer 380

Balanced growth of labour and capital in the Neoclassical gr

Question 381

E

Answer 381

According to the Neoclassical growth theory, sustained risin

Question 382

D

Answer 382

The aggregate production function shows the ________ for giv

Question 383

A

Answer 383

Neoclassical growth theory is based on the assumption of ___

Question 384

C

Answer 384

An aggregate production function exhibits constant returns t

Question 385

E

Answer 385

An aggregate production function exhibits increasing returns

Question 386

B

Answer 386

Consider the aggregate production function Y = F(K, L). If t

Question 387

C

Answer 387

Consider the aggregate production function Y = F(K, L). If t

Question 388

A

Answer 388

Consider an aggregate production function Y = F(K, L) that d

Question 389

E

Answer 389

Refer to Table 25-4. The production function that applies to

Question 390

A

Answer 390

Refer to Table 25-4. Diminishing marginal returns to labour

Question 391

B

Answer 391

Refer to Table 25-4. Consider the changes shown for L, K, an

Question 392

C

Answer 392

Refer to Table 25-4. Consider the changes shown for L, K, an

Question 393

B

Answer 393

Refer to Table 25-4. Consider the changes shown for L, K, an

Question 394

A

Answer 394

Embodied technical change is said to occur when A) older c

Question 395

C

Answer 395

Consider the Neoclassical growth model. Sustained economic g

Question 396

D

Answer 396

When a new personal computer is purchased to replace an old

Question 397

C

Answer 397

If a country experiences growth in total factor productivit

Question 398

C

Answer 398

The growth of total factor productivity, or the Solow res

Question 399

E

Answer 399

An example of embodied technical change is A) education th

Question 400

E

Answer 400

The Solow residual is an estimate of changes inA) economic g

Question 401

E

Answer 401

Modern or new theories of long-run economic growth are bas

Question 402

B

Answer 402

The new theories of economic growth emphasize that the pac

Question 403

B

Answer 403

According to the new theories of economic growth, increasi

Question 404

E

Answer 404

New theories of economic growth based on the idea that growt

Question 405

C

Answer 405

With respect to long-run economic growth, one rationale for

Question 406

B

Answer 406

According to some modern theories of long-run economic growt

Question 407

E

Answer 407

In new theories of endogenous growth, increasing marginal

Question 408

E

Answer 408

Compared to Neoclassical growth theory, newer endogenous gr

Question 409

B

Answer 409

Consider the newer theories of economic growth. Given the ra

Question 410

B

Answer 410

Modern growth theories are more optimistic than Neoclassical

Question 411

B

Answer 411

Which of the following statements is true of new growth theo

Question 412

D

Answer 412

One reason that investment in innovation is often considered

Question 413

D

Answer 413

Consider the competing products made by Apple (iPhone) and S

Question 414

C

Answer 414

Consider the significant costs to the innovators and develop

Question 415

A

Answer 415

Suppose that most of the worlds population would like to ac

Question 416

D

Answer 416

In 1950, when the worlds population was 2.5 billion, it was

Question 417

B

Answer 417

In the early 1970s, a group called the Club of Rome publis

Question 418

A

Answer 418

Economic growth allows increasing numbers of people around t

Question 419

D

Answer 419

The function of money in an economy is to serve as 1) a unit

Question 420

A

Answer 420

Money is commonly defined asA) a generally accepted medium o

Question 421

E

Answer 421

In order to be considered money, paper currency must beA)

Question 422

B

Answer 422

Doug is saving money in order to purchase a new snowboard ne

Question 423

B

Answer 423

Other things being equal, a rise in the price level willA) i

Question 424

B

Answer 424

Other things being equal, the purchasing power of money isA)

Question 425

C

Answer 425

When you are estimating your monthly income and expenses, mo

Question 426

C

Answer 426

Doug compares the unit price of chocolate bars in order to g

Question 427

E

Answer 427

The major advantage of using money rather than barter is tha

Question 428

D

Answer 428

The biggest disadvantage of a barter system compared to one

Question 429

D

Answer 429

Which of the following is an example of the use of money as

Question 430

A

Answer 430

If a majority of Canadian households and businesses refused

Question 431

E

Answer 431

In order for money to be successfully used as a medium of ex

Question 432

D

Answer 432

The use of money in an economy does which of the following?A

Question 433

C

Answer 433

When metal coins, such as gold and silver, were used as mone

Question 434

B

Answer 434

Historically, when gold and silver coins were used as money,

Question 435

C

Answer 435

Greshams law predicts thatA) good money drives out bad mone

Question 436

E

Answer 436

Which of the following is consistent with the predictions of

Question 437

B

Answer 437

Which of the following was the most important initial step i

Question 438

D

Answer 438

Suppose an economy has two types of money - gold and silver

Question 439

A

Answer 439

What do we mean in our current banking system when we say th

Question 440

C

Answer 440

The major problem of a currency that is fractionally backed

Question 441

A

Answer 441

Most Canadians accept Canadian dollars in payment for goods

Question 442

E

Answer 442

Fiat money has value because itA) can be manufactured at wil

Question 443

D

Answer 443

For a country to be on a gold standard, it mustA) use gold

Question 444

B

Answer 444

If most individuals accept paper currency in transactions, a

Question 445

E

Answer 445

The currency that is in circulation in Canada today isA) ful

Question 446

A

Answer 446

Which of the following illustrates the use of fiat money?A)

Question 447

B

Answer 447

Debit cards that are issued by commercial banks can be chara

Question 448

D

Answer 448

In recent years, the use of debit cards issued by commercial

Question 449

E

Answer 449

Which of the following statements about deposit money is tru

Question 450

C

Answer 450

The largest element of the Canadian money supply today isA)

Question 451

B

Answer 451

The functions of the Bank of Canada includeA) acting as the

Question 452

D

Answer 452

Basic functions of the Bank of Canada include1) acting as le

Question 453

A

Answer 453

The largest component of the assets of the Bank of Canada is

Question 454

C

Answer 454

The largest component of the liabilities of the Bank of Cana

Question 455

B

Answer 455

In the event of a sudden loss in confidence in the ability o

Question 456

E

Answer 456

Suppose the rare event occurs that a major Canadian commerci

Question 457

B

Answer 457

Which of the following statements best describes the relatio

Question 458

D

Answer 458

Which of the following entries would appear on the liabiliti

Question 459

B

Answer 459

Commercial banks in Canada are prohibited by law fromA) acce

Question 460

C

Answer 460

The financial crisis that occurred in 2007 and 2008 highligh

Question 461

B

Answer 461

An example of interbank activities in the Canadian banking

Question 462

C

Answer 462

The Canada Deposit Insurance Corporation (CDIC) was set up t

Question 463

B

Answer 463

Which of the following entries would appear on the liabiliti

Question 464

A

Answer 464

Which of the following entries would appear on the assets si

Question 465

E

Answer 465

Which of the following entries would appear on the liabiliti

Question 466

D

Answer 466

Refer to Table 26-1. What are the total assets on the balanc

Question 467

D

Answer 467

Refer to Table 26-1. What are the total liabilities on the b

Question 468

A

Answer 468

A bank run is unlikely to occur in Canada today becauseA) if

Question 469

B

Answer 469

What is a bank run? A) A situation where a commercial bank i

Question 470

C

Answer 470

Why is the possibility of a bank run extremely small in Cana

Question 471

A

Answer 471

Canadian commercial banks maintain their reserves in the for

Question 472

E

Answer 472

A commercial banks actual reserve ratio is theA) fraction o

Question 473

C

Answer 473

Excess reserves for a commercial bank refer toA) any surplu

Question 474

D

Answer 474

Consider a new deposit of $10 000 to the Canadian banking sy

Question 475

A

Answer 475

A commercial banks target reserve ratio is theA) fraction o

Question 476

D

Answer 476

If all the commercial banks in the banking system collective

Question 477

D

Answer 477

Which of the following statements about reserve ratios at Ca

Question 478

C

Answer 478

Without a central bank, commercial banks in Canada would pro

Question 479

D

Answer 479

Commercial banks hold a fraction of their deposits in cash i

Question 480

B

Answer 480

The Canadian banking system is a A) gold-reserve system.B) f

Question 481

C

Answer 481

Suppose a commercial bank has a level of target reserves of

Question 482

B

Answer 482

Suppose a commercial bank has a target reserve ratio of 1%,

Question 483

C

Answer 483

Suppose Bank ABC has a target reserve ratio of 10%. If Bank

Question 484

D

Answer 484

Suppose Bank ABC has a target reserve ratio of 2%. If Bank A

Question 485

D

Answer 485

Suppose the Canadian banking system jointly has $20 million

Question 486

E

Answer 486

A central bank can create money byA) selling some of its f

Question 487

B

Answer 487

Which of the following examples constitutes a new deposit to

Question 488

D

Answer 488

Which of the following examples constitutes a new deposit to

Question 489

C

Answer 489

Refer to Table 26-2. Assume that Bank North is operating wit

Question 490

B

Answer 490

Refer to Table 26-2. What are the income-earning assets for

Question 491

D

Answer 491

Refer to Table 26-2. If Bank North receives a new deposit of

Question 492

C

Answer 492

Refer to Table 26-2. Assume that Bank North is operating at

Question 493

B

Answer 493

Refer to Table 26-2. Assume that Bank North is operating at

Question 494

C

Answer 494

Refer to Table 26-3. What are the reserves held by Bank Wes

Question 495

D

Answer 495

Refer to Table 26-3. Assume that Bank West is operating wit

Question 496

D

Answer 496

Refer to Table 26-3. If Bank West receives a new deposit of

Question 497

B

Answer 497

Refer to Table 26-3. Assume that Bank West is operating at i

Question 498

A

Answer 498

Refer to Table 26-3. Assume that Bank West is operating at i

Question 499

B

Answer 499

Refer to Table 26-4. Bank XYZ is immediately in a position t

Question 500

D

Answer 500

Refer to Table 26-4. If Bank XYZ increases its loans to the

Question 501

C

Answer 501

Refer to Table 26-4. The maximum creation of new deposits by

Question 502

A

Answer 502

Refer to Table 26-4. Suppose the public decides to hold 5% o

Question 503

B

Answer 503

Refer to Table 26-4. Suppose the public decides to hold 15%

Question 504

C

Answer 504

Refer to Table 26-5. Bank XYZ is immediately in a position t

Question 505

B

Answer 505

Refer to Table 26-5. Assume that Bank XYZ has decreased its

Question 506

A

Answer 506

Refer to Table 26-5. As a result of this withdrawal from the

Question 507

E

Answer 507

Consider the creation of deposit money in the banking system

Question 508

C

Answer 508

Suppose you found a $100 bill that was lost for many years u

Question 509

D

Answer 509

Suppose you found a $100 bill that was lost for many years u

Question 510

E

Answer 510

If all the banks in the banking system collectively have $20

Question 511

E

Answer 511

If all the banks in the banking system collectively have $50

Question 512

C

Answer 512

Assume that Bank ABC has a target reserve ratio of 10%. If B

Question 513

D

Answer 513

Suppose the excess reserves in Toronto Dominion Bank increas

Question 514

E

Answer 514

Suppose the excess reserves in Toronto Dominion Bank increas

Question 515

D

Answer 515

A desire by ________ has no effect on the ability of the ban

Question 516

C

Answer 516

Refer to Table 26-6. Assume that Northern Banks target rese

Question 517

B

Answer 517

Refer to Table 26-6. Northern Bank extends credit to its cus

Question 518

E

Answer 518

Refer to Table 26-6. Owners of Northern Bank contributed mon

Question 519

B

Answer 519

Refer to Table 26-6. Assume that Northern Banks target rese

Question 520

D

Answer 520

Refer to Table 26-6. Assume that Northern Banks target rese

Question 521

A

Answer 521

Refer to Table 26-6. Northern Bank holds cash in its vault a

Question 522

D

Answer 522

Consider a new deposit of $10 000 to the Canadian banking sy

Question 523

C

Answer 523

Consider a new deposit of $10 000 to the Canadian banking sy

Question 524

E

Answer 524

Consider a new deposit of $100 000 to the Canadian banking s

Question 525

E

Answer 525

If the Bank of Canada enters the open market and purchases $

Question 526

A

Answer 526

) If the Bank of Canada enters the open market and sells $10

Question 527

B

Answer 527

If the Bank of Canada enters the open market and sells $1000

Question 528

D

Answer 528

If the target reserve ratio in the banking system is 20%, th

Question 529

D

Answer 529

If the target reserve ratio in the banking system is 10%, th

Question 530

E

Answer 530

If the target reserve ratio in the banking system is 1%, the

Question 531

B

Answer 531

Suppose Bank ABC has a target reserve ratio of 10%, no exces

Question 532

D

Answer 532

The expansion of deposits resulting from an injection of new

Question 533

A

Answer 533

Suppose that the cash drain in the banking system increases

Question 534

B

Answer 534

When discussing the banking system, a cash drain of 5% means

Question 535

B

Answer 535

In reality, the reserve ratio for Canadian commercial banks

Question 536

B

Answer 536

The money supply in Canada is measured using M1, M2, M2+, an

Question 537

A

Answer 537

Until recently, and for many years, the common definition of

Question 538

B

Answer 538

As a measure of the Canadian money supply, M2+ is defined as

Question 539

E

Answer 539

The main distinction between M2 and M2+ is that M2+ also inc

Question 540

D

Answer 540

The concept of near money refers toA) money substitutes su

Question 541

D

Answer 541

Credit cards are considered to be money substitutes instea

Question 542

C

Answer 542

Which of the following is an example of near money?A) Scot

Question 543

D

Answer 543

When you pay for your $74 purchase at the grocery store with

Question 544

C

Answer 544

The M2 and M2+ definitions of the money supply concentrate o

Question 545

A

Answer 545

The M2++ and M3 definitions of the money supply include fina

Question 546

D

Answer 546

Developments in the financial industry in recent years have

Question 547

D

Answer 547

Other things being equal, bond prices A) are unaffected by c

Question 548

B

Answer 548

The present value of a financial asset is A) the most someon

Question 549

D

Answer 549

The present value of a bond is determined by theA) face valu

Question 550

A

Answer 550

If Robert expects interest rates to fall in the near future,

Question 551

C

Answer 551

When Janet expects interest rates to rise in the near future

Question 552

B

Answer 552

What is the present value of a bond that pays $121.00 one ye

Question 553

E

Answer 553

When i is the annual interest rate, the formula for calculat

Question 554

D

Answer 554

If the annual market rate of interest is 5%, an asset that p

Question 555

B

Answer 555

If the annual interest rate is 8%, an asset that promises to

Question 556

D

Answer 556

If the annual interest rate is 10%, $5.00 received today has

Question 557

E

Answer 557

If the annual interest rate is 3%, $10 000 received today ha

Question 558

A

Answer 558

Consider a bond with a face value of $10 000, a three-year t

Question 559

A

Answer 559

In a competitive financial market, the equilibrium price of

Question 560

E

Answer 560

Consider a bond that promises to make coupon payments of $10

Question 561

E

Answer 561

Consider a bond that promises to make coupon payments of $10

Question 562

A

Answer 562

When considering the present value of any financial asset th

Question 563

E

Answer 563

Consider a Government of Canada bond with a face value of $1

Question 564

C

Answer 564

Consider a Hydro Quebec bond with a face value of $1000, and

Question 565

C

Answer 565

If the current market price of a bond is less than the prese

Question 566

D

Answer 566

An analyst is considering the purchase of a Government of Ca

Question 567

B

Answer 567

An analyst is considering the purchase of a Government of Ca

Question 568

C

Answer 568

In order to calculate the present value of the sum of future

Question 569

C

Answer 569

When the market price of a bond falls, ceteris paribus, then

Question 570

B

Answer 570

Suppose the market interest rate rises from 3% to 4%. This w

Question 571

C

Answer 571

Suppose the market interest rate falls from 3% to 2%. This w

Question 572

D

Answer 572

Suppose the market interest rate is stable at 4% and we see

Question 573

D

Answer 573

Suppose a Government of Canada bond is being offered in fina

Question 574

C

Answer 574

Suppose a Government of Canada bond is being offered in fina

Question 575

B

Answer 575

Consider two bonds, Bond A and Bond B, offered for sale in t

Question 576

C

Answer 576

Consider two bonds, Bond A and Bond B, offered for sale in t

Question 577

D

Answer 577

Consider two bonds, Bond A and Bond B, offered for sale in t

Question 578

A

Answer 578

The term demand for money usually refers to theA) aggregat

Question 579

A

Answer 579

The opportunity cost of holding money rather than bonds isA)

Question 580

C

Answer 580

If a person is holding money for the purchase of goods and s

Question 581

D

Answer 581

The transactions demand for money arises from the fact tha

Question 582

D

Answer 582

The precautionary demand for money arises from theA) fear

Question 583

C

Answer 583

Other things being equal, the transactions demand for money

Question 584

C

Answer 584

Consider the demand for money. If real GDP falls, other thin

Question 585

C

Answer 585

Suppose an economic analyst suggests that investors should n

Question 586

B

Answer 586

A firm that holds cash to avoid penalties associated with th

Question 587

E

Answer 587

Among other things, people hold cash balances for which of t

Question 588

B

Answer 588

Speculative demand for money arises from the desire by indiv

Question 589

E

Answer 589

In the basic AD/AS macro model, it is assumed that, for any

Question 590

E

Answer 590

The demand for money (MD) function defines the relationship

Question 591

A

Answer 591

Refer to Figure 27-1. A rightward shift of the money demand

Question 592

D

Answer 592

Refer to Figure 27-1. A leftward shift in the money demand c

Question 593

E

Answer 593

Refer to Figure 27-1. Given the money demand curve, , an in

Question 594

D

Answer 594

Refer to Figure 27-1. Given the money demand curve, , a dec

Question 595

A

Answer 595

If there are just two assets, bonds and money, then an exces

Question 596

B

Answer 596

Assume there are just two assets, money and bonds. We can ex

Question 597

D

Answer 597

According to the liquidity preference theory of the rate o

Question 598

C

Answer 598

If the general price level were to increase, other things be

Question 599

C

Answer 599

If the annual market interest rate is 20%, the annual opport

Question 600

E

Answer 600

Suppose that at a given interest rate and money supply, all

Question 601

D

Answer 601

Suppose that at a given interest rate and money supply, all

Question 602

B

Answer 602

Consider the demand for money curve. As we move up and to th

Question 603

E

Answer 603

Ceteris paribus, a rightward shift of the money demand curve

Question 604

C

Answer 604

When there is an excess demand for money balances, monetary

Question 605

B

Answer 605

Consider a money market in which there is an excess supply o

Question 606

E

Answer 606

Consider a money market in which there is an excess demand f

Question 607

D

Answer 607

When there is an excess supply of money, monetary equilibriu

Question 608

B

Answer 608

Monetary equilibrium occurs when theA) growth in the money s

Question 609

E

Answer 609

If the economy is currently in monetary equilibrium, an incr

Question 610

E

Answer 610

Refer to Figure 27-2. Starting at equilibrium E0, an increas

Question 611

B

Answer 611

Refer to Figure 27-2. Starting at equilibrium E0, an increas

Question 612

D

Answer 612

Refer to Figure 27-2. If the interest rate is i2, the subseq

Question 613

A

Answer 613

Refer to Figure 27-2. If the interest rate is i1, the subseq

Question 614

A

Answer 614

Refer to Figure 27-2. Suppose the market interest rate is .

Question 615

D

Answer 615

Refer to Figure 27-2. Suppose the market interest rate is .

Question 616

E

Answer 616

When the price level increases, ceteris paribus, it causes h

Question 617

C

Answer 617

If there are just two assets, bonds and money, then an equil

Question 618

D

Answer 618

How does monetary equilibrium re-establish itself when there

Question 619

A

Answer 619

The linkage between changes in monetary equilibrium and chan

Question 620

D

Answer 620

Other things being equal, a reduction in the money supply wi

Question 621

E

Answer 621

The economys investment demand function describes theA) pos

Question 622

A

Answer 622

Refer to Figure 27-3. The increase in the money supply from

Question 623

B

Answer 623

Refer to Figure 27-3. The increase in desired investment exp

Question 624

E

Answer 624

Refer to Figure 27-3. Part (i) of the figure shows the money

Question 625

A

Answer 625

The monetary transmission mechanism can be set in motion whe

Question 626

C

Answer 626

The monetary transmission mechanism describes the process by

Question 627

D

Answer 627

Which one of the following statements best describes the mon

Question 628

B

Answer 628

Consider monetary equilibrium and the monetary transmission

Question 629

C

Answer 629

An increase in the money supply sets the monetary transmissi

Question 630

E

Answer 630

A decrease in the money supply sets the monetary transmissio

Question 631

B

Answer 631

Consider the monetary transmission mechanism. A disturbance

Question 632

B

Answer 632

Consider monetary equilibrium and the monetary transmission

Question 633

C

Answer 633

Consider monetary equilibrium and the monetary transmission

Question 634

B

Answer 634

A decrease in the money supply is most likely toA) raise int

Question 635

A

Answer 635

If the Bank of Canada were to increase the money supply, oth

Question 636

D

Answer 636

) If the Bank of Canada were to reduce the money supply, oth

Question 637

C

Answer 637

If real GDP is greater than potential GDP, the output gap co

Question 638

A

Answer 638

Which of the following explanations for the negative slope o

Question 639

D

Answer 639

The monetary transmission mechanism in an OPEN economy is mo

Question 640

C

Answer 640

Consider the monetary transmission mechanism in an open econ

Question 641

A

Answer 641

Consider the monetary transmission mechanism in an open econ

Question 642

B

Answer 642

Which of the following correctly describes the way in which

Question 643

A

Answer 643

Changes in the money supply in an open economy, as compared

Question 644

E

Answer 644

Which of the following phenomena add a second channel to the

Question 645

C

Answer 645

Consider the monetary transmission mechanism. In an open eco

Question 646

D

Answer 646

Consider the monetary transmission mechanism. In an open eco

Question 647

B

Answer 647

Other things being equal, a decrease in the money supply wil

Question 648

C

Answer 648

If the economy is experiencing an undesired inflationary gap

Question 649

C

Answer 649

The monetary transmission mechanism provides a partial expla

Question 650

B

Answer 650

Which of the following is partly responsible for the negativ

Question 651

A

Answer 651

Refer to Figure 27-4. The economy begins in equilibrium at E

Question 652

B

Answer 652

Refer to Figure 27-4. The economy begins in equilibrium at E

Question 653

A

Answer 653

Refer to Figure 27-4. The economy begins in equilibrium at E

Question 654

C

Answer 654

Refer to Figure 27-5. This economy begins in equilibrium wit

Question 655

D

Answer 655

Refer to Figure 27-5. This economy begins in equilibrium wit

Question 656

A

Answer 656

Refer to Figure 27-5. This economy begins in equilibrium wit

Question 657

C

Answer 657

Refer to Figure 27-5. This economy begins in equilibrium wit

Question 658

C

Answer 658

) Refer to Figure 27-6. The famous debate from the the 1950s

Question 659

B

Answer 659

Refer to Figure 27-6. The famous debate from the 1950s and 1

Question 660

D

Answer 660

The view of the Classical economists regarding the neutrali

Question 661

C

Answer 661

Which of the following best represents the view of the Class

Question 662

A

Answer 662

According to the views of the Classical economists, if the m

Question 663

E

Answer 663

Classical economists belief in the neutrality of money le

Question 664

D

Answer 664

Which of the following statements best describes the differe

Question 665

C

Answer 665

The long-run neutrality of money implies thatA) changes to t

Question 666

E

Answer 666

The hypothesis in economics known as hysteresis is thatA) th

Question 667

D

Answer 667

Suppose changes in the money supply only affected the price

Question 668

E

Answer 668

Refer to Figure 27-5. This economy begins in equilibrium wit

Question 669

B

Answer 669

Refer to Figure 27-5. This economy begins in equilibrium wit

Question 670

D

Answer 670

Refer to Figure 27-5. This economy begins in equilibrium wit

Question 671

E

Answer 671

The proposition of long-run neutrality of money is supported

Question 672

C

Answer 672

Other things being equal, the steeper the AS curve for the e

Question 673

E

Answer 673

Other things being equal, the flatter the AS curve for the e

Question 674

B

Answer 674

Consider the monetary transmission mechanism. Other things b

Question 675

A

Answer 675

Consider the monetary transmission mechanism. Other things b

Question 676

D

Answer 676

Consider the monetary transmission mechanism. If the Bank of

Question 677

D

Answer 677

The effectiveness of monetary policy in bringing about chang

Question 678

D

Answer 678

Monetary policy can have the largest impact on desired aggre

Question 679

C

Answer 679

Monetary policy will be least effective in changing aggregat

Question 680

C

Answer 680

Consider the monetary transmission mechanism. A relatively s

Question 681

C

Answer 681

Any central bank, including the Bank of Canada, can implemen

Question 682

A

Answer 682

In general, if a central bank chooses to target the money su

Question 683

E

Answer 683

In general, if a central bank chooses to target the interest

Question 684

D

Answer 684

Consider the implementation of monetary policy. One difficul

Question 685

E

Answer 685

If the Bank of Canada chooses to expand M2 by exactly $1 mil

Question 686

B

Answer 686

In practice, it is not possible for the Bank of Canada to co

Question 687

C

Answer 687

Suppose the Bank of Canada were to implement an expansionary

Question 688

E

Answer 688

One reason that the Bank of Canada does not try to influence

Question 689

B

Answer 689

Most central banks, including the Bank of Canada, implement

Question 690

E

Answer 690

The Bank of Canada chooses to influence interest rates direc

Question 691

B

Answer 691

Refer to Figure 28-1. If the Bank of Canada raises the targe

Question 692

B

Answer 692

Refer to Figure 28-1. If the Bank of Canada pursues a(n) ___

Question 693

E

Answer 693

Refer to Figure 28-1. If the Bank of Canadas goal is to inc

Question 694

D

Answer 694

Refer to Figure 28-1. The Bank of Canada must be able to eas

Question 695

C

Answer 695

Refer to Figure 28-1. One advantage of implementing monetary

Question 696

C

Answer 696

In practice, the Bank of Canada uses monetary policy to redu

Question 697

B

Answer 697

What is the bank rate?A) The interest rate at which the Ba

Question 698

B

Answer 698

Loans from the Bank of Canada areA) made only to the Canadia

Question 699

A

Answer 699

To reduce short-term market interest rates, the Bank of Cana

Question 700

B

Answer 700

The Bank of Canada determines the bank rate by setting it

Question 701

B

Answer 701

To raise short-term market interest rates, the Bank of Canad

Question 702

A

Answer 702

In practice, the Bank of Canada implements its monetary poli

Question 703

E

Answer 703

The term structure of interest rates refers toA) the general

Question 704

C

Answer 704

The interest rate that commercial banks charge each other fo

Question 705

D

Answer 705

The interest rate that the Bank of Canada charges commercial

Question 706

D

Answer 706

Suppose the Bank of Canada announces its target for the over

Question 707

E

Answer 707

The Bank of Canada establishes a rate at which they will len

Question 708

C

Answer 708

Suppose the Bank of Canada lowers its target for the overnig

Question 709

B

Answer 709

Suppose the Bank of Canada lowers its target for the overnig

Question 710

D

Answer 710

Suppose the actual overnight interest rate is 3.5%. If the B

Question 711

A

Answer 711

Suppose the actual overnight interest rate is 4%. If the Ban

Question 712

B

Answer 712

The overnight interest rate is crucial to the Bank of Canada

Question 713

C

Answer 713

Suppose the Bank of Canada announces its target for the over

Question 714

B

Answer 714

Suppose the Bank of Canadas announced target for the overni

Question 715

C

Answer 715

How does the Bank of Canada communicate its target for the o

Question 716

E

Answer 716

In Canada, open-market operations areA) government actions a

Question 717

C

Answer 717

The Bank of Canadas purchases and sales of government secur

Question 718

D

Answer 718

If the Bank of Canada chooses to expand the money supply dir

Question 719

E

Answer 719

When the Bank of Canada enters the open market and buys or s

Question 720

E

Answer 720

The Bank of Canada conducts its open-market operations direc

Question 721

C

Answer 721

The amount of currency in circulation in the Canadian econom

Question 722

A

Answer 722

Suppose the Bank of Canada reduces its target for the overni

Question 723

D

Answer 723

Suppose the Bank of Canada increases its target for the over

Question 724

D

Answer 724

An expansionary monetary policy by the Bank of Canada could

Question 725

A

Answer 725

An expansionary monetary policy would ________ and would eve

Question 726

D

Answer 726

Suppose the Canadian economy had an inflationary gap. To dec

Question 727

E

Answer 727

Suppose the Canadian economy had a recessionary gap. To incr

Question 728

B

Answer 728

The best description of the cause-and-effect chain of a cont

Question 729

A

Answer 729

The best description of the cause-and-effect chain of an exp

Question 730

C

Answer 730

To remove an inflationary gap, the Bank of Canada would prob

Question 731

C

Answer 731

To remove a recessionary gap, the Bank of Canada would proba

Question 732

D

Answer 732

If there were a large and persistent recessionary gap, an ap

Question 733

D

Answer 733

Changes in monetary aggregates such as M2 and M2+ can be a p

Question 734

A

Answer 734

If desired investment spending is relatively sensitive to ch

Question 735

B

Answer 735

If we observe that the bank rate has increased, we can concl

Question 736

D

Answer 736

If we observe that the bank rate has fallen, we can conclude

Question 737

E

Answer 737

If we observe a small increase in the actual overnight inter

Question 738

E

Answer 738

If we observe a small decrease in the actual overnight inter

Question 739

E

Answer 739

If we observe that the actual rate of CPI inflation has fall

Question 740

E

Answer 740

If we observe that the actual rate of CPI inflation has incr

Question 741

E

Answer 741

If we observe that short-term market interest rates have fal

Question 742

E

Answer 742

The monetary transmission mechanism describes how changes in

Question 743

D

Answer 743

The Bank of Canada initially implements an expansionary mone

Question 744

B

Answer 744

The Bank of Canada initially implements a contractionary mon

Question 745

E

Answer 745

Suppose the economy is experiencing an inflationary gap. Whi

Question 746

A

Answer 746

How does the Bank of Canada set in motion the monetary trans

Question 747

C

Answer 747

When the Bank of Canada reduces the interest rate we call th

Question 748

D

Answer 748

When the Bank of Canada increases the interest rate we call

Question 749

B

Answer 749

Most central banks accept that, in the long run, monetary po

Question 750

D

Answer 750

Many central banks have established formal targets for the r

Question 751

E

Answer 751

High inflation is costly to firms and individuals. Of the fo

Question 752

C

Answer 752

Which of the following describes the cause of a sustained in

Question 753

C

Answer 753

Given its existing policy regime of inflation targeting, t

Question 754

D

Answer 754

Given its existing policy regime of inflation targeting, t

Question 755

E

Answer 755

The long-run target currently used by the Bank of Canada is

Question 756

C

Answer 756

Consider the following statement about inflation targeting:

Question 757

A

Answer 757

Because of the volatility of food and energy prices, the Ban

Question 758

A

Answer 758

One problem with focusing on the CPI when conducting monetar

Question 759

C

Answer 759

Most central banks in the developed countries focus their at

Question 760

E

Answer 760

High and uncertain inflation is damaging to the economy beca

Question 761

D

Answer 761

It is widely accepted by economists that monetary policy is

Question 762

C

Answer 762

As of 2015, the Bank of Canadas policy objective is to main

Question 763

D

Answer 763

The Bank of Canadas formal policy target is ________. Its

Question 764

B

Answer 764

In an effort to maintain inflation at its targeted level the

Question 765

B

Answer 765

An example of how inflation targeting by the Bank of Canada

Question 766

B

Answer 766

In the short run the Bank of Canada aims to ________, in an

Question 767

B

Answer 767

The economic variables that the Bank of Canada tries to infl

Question 768

C

Answer 768

20) Inflation targetingA) is irrelevant to the stability of

Question 769

C

Answer 769

Suppose output is at its potential level and then there is a

Question 770

D

Answer 770

Inflation that is fully anticipated by workers, firms, and c

Question 771

B

Answer 771

Which of the following goods are included in Canadas measur

Question 772

B

Answer 772

Consider a central bank that chooses to implement its moneta

Question 773

E

Answer 773

Most economists now accept the proposition thatA) an ideal m

Question 774

D

Answer 774

Suppose Canadian real GDP is currently equal to potential GD

Question 775

B

Answer 775

Suppose Canadian real GDP is currently equal to potential GD

Question 776

E

Answer 776

Which of the following events would justify the Bank of Cana

Question 777

E

Answer 777

Suppose Canadian real GDP is equal to potential GDP. An appr

Question 778

C

Answer 778

Suppose Canadian real GDP is equal to potential GDP. A signi

Question 779

C

Answer 779

Suppose Canadian real GDP is equal to potential GDP. A signi

Question 780

B

Answer 780

Suppose Canadian real GDP is equal to potential GDP. A signi

Question 781

D

Answer 781

Time lags in the conduct of monetary policy can causeA) mone

Question 782

C

Answer 782

Economists at the Bank of Canada estimate that time lags in

Question 783

C

Answer 783

If an economist supports targeting inflation as opposed to m

Question 784

B

Answer 784

If the Bank of Canada were required to gain approval for all

Question 785

B

Answer 785

It might take a while before the effects of changes in monet

Question 786

E

Answer 786

Suppose the Bank of Canada is criticized for implementing a

Question 787

A

Answer 787

In 1980, the annual inflation rate in Canada wasA) over 12%.

Question 788

A

Answer 788

In the early 1980s, the Bank of Canada contracted the rate o

Question 789

C

Answer 789

During a period of renewed inflation fears in 1988, the gove

Question 790

A

Answer 790

During the period of economic recovery between 1983 and 1987

Question 791

A

Answer 791

The decision by the Bank of Canada and many other central ba

Question 792

A

Answer 792

In the early 1980s, when the Bank of Canada was focusing its

Question 793

A

Answer 793

In 1994, Gordon Thiessen was appointed as the new governor o

Question 794

E

Answer 794

What is the policy response by the Bank of Canada to an infl

Question 795

C

Answer 795

In 2007 and 2008, Canada was affected by the global financia

Question 796

B

Answer 796

In 2007 and 2008, Canada was affected by the global financia

Question 797

E

Answer 797

In 2007 and 2008, Canada was affected by the global financia

Question 798

A

Answer 798

In 2007 and 2008, Canada was affected by the global financia

Question 799

B

Answer 799

During the financial crisis that began in 2008 the Bank of C

Question 800

A.

Answer 800

f Canadian exports of goods and services were ​$36 ​billion,

Question 801

B.

Answer 801

Consider the​ balance-of-payments accounting information for

Question 802

E.

Answer 802

Suppose that a​ countrys private saving is ​$7 ​million, it

Question 803

C.

Answer 803

Given the information presented in the table below​ (billion

Question 804

A.

Answer 804

If Canada has a large persistent current account surplus​, t

Question 805

D.

Answer 805

Consider the​ balance-of-payments accounting information for

Question 806

A.

Answer 806

A negative value for the line item​ Changes in official int

Question 807

E.

Answer 807

When Canada has a balance of payments deficit​, this means t

Question 808

C.

Answer 808

If Canadian demand for French wine increases​, the supply of

Question 809

increase; decrease; E

Answer 809

When the Canadian dollar appreciates​, the euro price of Can

Question 810

E.

Answer 810

A Canadian traveling to the United States converts​ $100 Can

Question 811

A.

Answer 811

Suppose that a laptop computer sells in China for 4070 ​yuan

Question 812

fewer; fallen; 1.25; 1.25demand and supply; supply of; demand for; fall; appreciate; an increase; appreciate; an increase; a decrease; rise; depreciate

Answer 812

An appreciation of the Canadian dollar means that it takes ▼

Question 813

D.

Answer 813

If German demand for Canadian lumber increases​, the supply

Question 814

flexible; fixed; supply of; purchase; demand for; sell

Answer 814

a. If the exchange rate is determined by the equality of sup

Question 815

a. Bb. Dis not

Answer 815

Many commentators are perplexed when they observe a deprecia

Question 816

D.

Answer 816

In the European​ Union, until the introduction of the​ euro,

Question 817

D.

Answer 817

Assume that a government begins to run a large budget surplu

Question 818

b. 1. undervalued2. overvalued3. undervalued4. overvaluedc.Traded; lowd. are not; is not; computer RAM chips

Answer 818

Every few​ months, The Economist publishes its​ Big Mac​ In

Question 819

not consistent; government; no

Answer 819

A former Canadian prime minister once suggested that Canada

Question 820

a. Bb. Bwould

Answer 820

In​ 2015, a letter to a Canadian national newspaper argued t

Question 821

B

Answer 821

Purchasing power parity theory would suggest that if the Can

Question 822

autonomous

Answer 822

In our macro​ model, government purchases​ (G) is ▼ with re

Question 823

government transfer payments; total transfer payments

Answer 823

G does not include ▼ government purchases of goods and servi

Question 824

$1

Answer 824

The net tax​ rate, t, indicates the increase in tax revenues

Question 825

disposable income

Answer 825

T enters the AE function only indirectly through its effect

Question 826

budget deficit; budget surplus; G = T

Answer 826

If G is larger than​ T, there is a ▼ budget deficitbalanced

Question 827

C.3071

Answer 827

Consider the​ governments budget balance. Suppose G = 430 a

Question 828

A.Net tax revenues enter the AE function indirectly through its effect on disposable income.

Answer 828

Which of the following is correct regarding the role of gove

Question 829

E.

Answer 829

Consider the​ governments budget balance. Suppose G=425 and

Question 830

D.government spending and taxation.

Answer 830

In the 2009 and 2010 Canadian federal budgets in the midst o

Question 831

A.directly to aggregate demand by this amount and cause an eventual change in national income equal to more than $ 5 billion.

Answer 831

b. Explain the effect on GDP from an increase in spending by

Question 832

A.directly to disposable income comma only a fraction of which (determined by the MPC) will than be spent.

Answer 832

c. Explain the effect on GDP from a tax rebate equal in valu

Question 833

C.increases in government spending as far as their eventual effect on national income will be larger.

Answer 833

d. Did the minister of finance choose to emphasize increases

Question 834

autonomous; foreign income and international relative prices

Answer 834

a. In our macro​ model, exports​ (X) are ▼ dependentautonomo

Question 835

imports; $1

Answer 835

The marginal propensity to import​ (m) indicates the increas

Question 836

NX = X minus mY; rise; positively

Answer 836

The equation for the net export function​ (NX) is ▼ NX = X m

Question 837

rise; downward; fall; upward

Answer 837

If Canadian prices rise relative to those in other​ countrie

Question 838

D.a=​$180​, b=​$60​, c=-​$60​, d=-​$180

Answer 838

The table below shows national income and imports. The level

Question 839

B.at ​$3 comma 300

Answer 839

The table below shows national income and imports. The level

Question 840

C.0.69

Answer 840

Consider an aggregate consumption function in a simple macro

Question 841

D.1 comma 025

Answer 841

Consider a simple macro model with a constant price level an

Question 842

B.2.78

Answer 842

he diagram below shows desired aggregate expenditure for a h

Question 843

D.2.174

Answer 843

In a macro model where the marginal propensity to consume ou

Question 844

C.decrease​; ​$1.75 billion

Answer 844

Consider a model in which output is​ demand-determined. If t

Question 845

C.the national income is demand determined.

Answer 845

In the aggregate expenditure​ model, the assumption of a con

Question 846

A.firms are price setters.

Answer 846

We can expect the national income to be​ demand-determined w

Question 847

D

Answer 847

A​ companys wages and salaries are part of its value added.

Question 848

F

Answer 848

A​ companys wages and salaries are part of its value added.

Question 849

E

Answer 849

In​ Shoetown, a rancher takes ​$60 worth of inputs and produ

Question 850

B

Answer 850

​Jodies Bakery generates a yearly revenue of ​$6200. Throug

Question 851

B

Answer 851

The expenditure approach to measuring GDP shows that Is thi

Question 852

B

Answer 852

The expenditure approach to measuring GDP shows that It is c

Question 853

C

Answer 853

Which of the following transactions would not be included in

Question 854

A

Answer 854

The table below includes data for a​ one-year period require

Question 855

E

Answer 855

Suppose a government collects​ $12.8 billion in various tax​

Question 856

C

Answer 856

In​ 2015, the United Nations ranked Norway first on thE Huma

Question 857

E

Answer 857

The table below shows the total output and prices for an eco

Question 858

C

Answer 858

The table below shows total output for an economy over 2 yea

Question 859

D

Answer 859

The table below shows total output for an economy over 3 yea

Question 860

31.87%, 29.46%

Answer 860

Consider the following data for a hypothetical economythat p

Question 861

4500

Answer 861

Max is a carpenter and his shop generates a yearly revenue o

Question 862

7200, 10000, 4500

Answer 862

Aminerminerminesminesiron oreiron ore​,which he sells to abl