Economics 203 is the Principles Of Macroeconomics class. Depending on the Professor, the exams format may or may not be multiple choice. This quiz only covers materials from Chapters 9, 10, 11, 14, 15 and 16 from 6th Canadian Edition of Principles of Macroeconomics by Mankiw, Kneebone and McKenzie. You may try Midterm I and Final exams for questions from other chapters.
Disclaimer: While every reasonable effort is made to ensure that the information provided is accurate, no guarantees for the currency or accuracy of information are made. It takes several proof readings and rewrites to bring the quiz to an exceptional level. If you find an error, please contact me as soon as possible. Please indicate the question ID-Number or description because server may randomize the questions and answers.
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Economics (ECON 203-UCAL) Final Exam
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Question 1 |
a) _______ aggregate supply curve
b) _______ aggregate demand curve.
A | shift , have no effect on |
B | None of the listed answers are correct. |
C | shift , shift |
D | have no effect on , shift |
E | have no effect on , have no effect on |
Question 2 |
A | income and consumption. |
B | interest rates and borrowing. |
C | inflation & unemployment. |
D | prices and quantity demand. |
E | wage rate and unemployment. |
Question 3 |
A | Real GDP |
B | Nominal GDP |
C | Price level |
D | Velocity of money |
Question 4 |
A | the unemployment rate decreases and the labor force participation is unaffected. |
B | the unemployment rate increases and the labor force participation increases. |
C | the unemployment rate decreases and the labor force participation decreases. |
D | the unemployment rate increases and the labor force participation is unaffected. |
E | the unemployment rate increases and the labor force participation decreases. |
F | the unemployment rate is unaffected and the labor force participation increases. |
Question 5 |
A | increase and aggregate demand curve will not shift. |
B | increase and aggregate demand curve will shift to the right. |
C | increase and aggregate demand curve will shift to the left. |
D | decrease and aggregate demand curve will shift to the right. |
E | decrease and aggregate demand curve will not shift. |
Question 6 |
A | raises , raises , more unemployment |
B | None of the answers are correct. |
C | lowers , lowers , unemployment |
D | raises , lowers , more unemployment |
E | lowers , raises , unemployment |
Question 7 |
A | The interest rate changes at a rate of as twice as much as the money demanded. |
B | The money demanded changes at a rate of as twice as much as the interest rate. |
C | They are inversely related to each other. |
D | They are directly related to each other. |
Question 8 |
A | 3.00 |
B | 1.00 |
C | 4.00 |
D | 0.75 |
($3.00)/($4.00) = 0.75
Question 9 |
A | Unintentional wear off of coins. |
B | Clipping of money by the population that uses it. |
C | Government producing coins with lower amounts of precious metals during a recession. |
D | Acquisition of less goods at a higher price level. |
E | Replacement of one currency by a lower valued currency. |
Question 10 |
A | Expansionary monitory policy involving decrease in banking reserve ratio. |
B | Contractionary monetary policy involving buying bonds from the public by Bank of Canada. |
C | Contractionary monetary policy involving decrease in banking reserve ratio. |
D | Expansionary monitory policy involving decrease in money supply. |
Question 11 |
A | tender. |
B | bater. |
C | currency. |
D | fiat money. |
E | credits. |
Question 12 |
A | Buying a bond from a company or the government. |
B | Buying a stock from a company. |
C | A tax free saving account a high interest and mixed investments. |
D | A saving account with investments to supply the demands of lonable funds. |
E | A chequing account with no interest. |
Question 13 |
A | global input. |
B | global economy. |
C | balanced trade. |
D | global influence. |
E | trade balance. |
Question 14 |
A | L1 , L2, zero |
B | L1 , L1, zero |
C | L2 , L1, L2 minus L1 |
D | L2 , L0, L2 minus L0 |
E | L0 , L1, L0 minus L1 |
F | L0 , L0, zero |
Question 15 |
A | 15% because labor force must add up to 100%. |
B | 42.5% or half of employment rate. |
C | The unemployment rate cannot be determined with the given information. |
D | It is depend on the adult population. |
Question 16 |
A | amount of unemployment that an economy normally experiences. |
B | determined only based on the permanent long-term employment opportunities. |
C | the unemployment rate corrected for inflation, skill levels and other external factors. |
D | rate at which the unemployment fluctuates. |
Question 17 |
A | Manage funds for the federal government. |
B | Govern the monitory policies of the country. |
C | Facilitate financial activities of large corporations. |
D | Issue currency for circulation. |
E | Act as a commercial bank for financial intermediaries. |
Question 18 |
A | Higher the wage, lower will be the cost of obtaining raw materials. |
B | Workers are least likely to leave the company in the long run hence reducing costs associated with restaffing. |
C | Higher wages will allow the company to be competitive in the open market operations by increasing the profit marking through price adjustments. |
D | Consumers are most likely to buy goods and use services from companies that offer higher wages. |
E | Workers are most likely to postpone their retirement hence increasing the number of experienced workers. |
Question 19 |
A | all the people that are currently employed. |
B | all the people who are currently employed in full time jobs. |
C | all the people who are legally allow to work. |
D | everyone over the age of 18 in Canada. Hint: In Canada people as young as 14 years old can work. |
Question 20 |
A | Investments |
B | Doughnuts |
C | Lonable funds |
D | Inflation |
E | Exchange rates |
Question 21 |
Country | Currency | Currency per Canadian $ | Canadian Price Index | Currency Price Index |
Bolivia | Boliviano | 5.00 | 100 | 500 |
Japan | Yen | 100.00 | 100 | 20,000 |
Morocco | Dirham | 10.00 | 100 | 2000 |
Thailand | Baht | 30.00 | 100 | 2500 |
Australian | Dollar | 2.00 | 100 | 350 |
A | Japanese Yen, Moroccan Dirham and Australian Dollar |
B | Thai Baht |
C | Moroccan Dirham |
D | Bolivian Boliviano |
E | Australian Dollar and Japanese Yen |
F | Japanese Yen |
Question 22 |
A | Keynes' Effect |
B | Real Exchange Rate Effect |
C | Adverse Supply Shock |
D | Sticky-wage Theory |
E | Pigou's Wealth Effect |
Question 23 |
A | bank rate , prime rate |
B | overnight rate , prime rate |
C | prime rate , standard rate |
D | standard rate , prime rate |
E | None of the answers are correct. |
Question 24 |
A | Long Run Phillips Curve |
B | Short Run Phillips Curve |
C | Inflation Curve |
D | Short Run Supply Curve |
E | Long Run Demand Curve |
F | Employment Curve |
Question 25 |
A | Okun's Law |
B | Short Run Economics Principle |
C | Crowding Out Effect |
D | Principle of Economic Relativity |
E | Inflation Principle |
F | Liquidity Effect |
Question 26 |
A | The outcome is ambiguous. |
B | The aggregate demand curve would move to the left. |
C | The aggregate demand curve would move to the right. |
D | The aggregate demand (AD) curve would not shift, but we would move down along the AD curve. |
E | The aggregate demand (AD) curve would not shift, but we would move up along the AD curve. |
Question 27 |
A | the unemployment rate increases and the labor force participation decreases. |
B | the unemployment rate increases and the labor force participation increases. |
C | the unemployment rate increases and the labor force participation is unaffected. |
D | the unemployment rate is unaffected and the labor force participation increases. |
E | the unemployment rate decreases and the labor force participation is unaffected. |
F | the unemployment rate decreases and the labor force participation decreases. |
Question 28 |
A | employment is hindered or prevented by physical disabilities. |
B | if the person has been employed within the last few weeks, but currently have no employment. |
C | if the person is waiting to start a new job. |
D | if the person is searching for employment, but lacks proper skills or education. |
Question 29 |
A | the unemployment rate increases and the labor force participation increases. |
B | the unemployment rate increases and the labor force participation is unaffected. |
C | the unemployment rate increases and the labor force participation decreases. |
D | the unemployment rate decreases and the labor force participation is unaffected. |
E | the unemployment rate decreases and the labor force participation decreases. |
F | the unemployment rate is unaffected and the labor force participation increases. |
Question 30 |
A | Y = C + I + G +NX |
B | S = I - G |
C | Y = C + I + G - NX |
D | Y = C + I + G |
E | I = Y - C + G |
Question 31 |
A | Lower the bank rate. |
B | Open market operations of selling bonds. |
C | Lower the reserve ratio. |
D | Increase the money supply. |
Question 32 |
A | Short run inflation rate. |
B | Natural rate of unemployment at equilibrium. |
C | Expected inflation under expansionary monitory policy. |
D | Long run Phillip equilibrium. |
Question 33 |
A | Increase the minimum wage. |
B | Increase funding for post secondary education. |
C | Decrease the minimum wage. |
D | Implement an expansionary fiscal policy. |
Question 34 |
A | Supply of goods will decrease as production levels falls. |
B | Wages would not be properly adjusted to the price fluctuations in the market. |
C | Wages of workers will increase as profit for companies increase. |
D | Prices would not be adjusted properly to the fluctuations in cost of raw materials. |
Question 35 |
A | revalued. |
B | devalued. |
C | depreciated. |
D | appreciated. |
Question 36 |
A | Increase in inflation rate |
B | Decrease in velocity of money |
C | Increase in velocity of money |
D | Decrease in price |
Question 37 |
A | W1 , L2 |
B | W1 , L0 |
C | W0 , L0 |
D | W1 , L1 |
E | W0 , L1 |
Question 38 |
A | two or more markets are not at equilibrium. |
B | the exchange rate falls significantly. |
C | two or more markets are at equilibrium. |
D | the exchange rate increases significantly at the same time the inflation rate falls. |
Question 39 |
A | It deals with sort run tradeoffs between inflation and unemplymemt. |
B | It deals with sort run tradeoffs between government spending and tax increases. |
C | It deals with long run tradeoffs between government spending and tax increases. |
D | It deals with long run tradeoffs between inflation and unemplymet. |
Question 40 |
A | W1 , L0 |
B | W0 , L1 |
C | W1 , L1 |
D | W0 , L0 |
E | W1 , L2 |
Question 41 |
A | Fluidity of natural unemployment |
B | Cyclical unemployment |
C | Structural unemployment |
D | Rules imposed by governments |
Question 42 |
A | Government regulates the free market. |
B | Government prints more money to generate revenue. |
C | Government deregulates the free market. |
D | Government restrict the sales of both public and private bonds. |
E | Government increase the reserve ratio for all banks. |
Question 43 |
A | During an inflation in the Canadian market. |
B | When the price levels in Canada is lower than rest of the world. |
C | During periods of appreciation in Canadian dollar. |
D | When the purchasing power parity is at the equilibrium. |
Question 44 |
A | None of the answers are correct. |
B | A decrease in natural resources. |
C | A decrease in the capital stock. |
D | A decrease in the expected price level. |
E | A decrease in the price level. |
Question 45 |
A | decrease by $50 million and money supply decreases by $200 million. |
B | increase by $50 million and money supply decreases by $300 million. |
C | increase by $50 million and money supply decreases by $800 million. |
D | increase by $50 million and money supply decreases by $200 million. |
E | decrease by $50 million and money supply decreases by $800 million. |
Question 46 |
A | Shift in aggregate demand curve to the right, increased spending and increase in interest rate. |
B | Shift in aggregate demand curve to the left, increased spending and decrease in interest rate. |
C | Shift in aggregate demand curve to the right, increased spending and decrease in interest rate. |
D | Shift in aggregate demand curve to the left, increased spending and increase in interest rate. |
E | None of the the answers are correct. |
Question 47 |
A | Domestic price level |
B | Real exchange rate |
C | Nominal exchange rate |
D | Output or real GDP |
Question 48 |
A | Increase in nominal exchange rate and the Canadian dollar would depreciate. |
B | Decrease in nominal exchange rate and the Canadian dollar would appreciate. |
C | Decrease in nominal exchange rate and no ambiguous change to the Canadian dollar. |
D | Decrease in nominal exchange rate and the Canadian dollar would depreciate. |
E | Increase in nominal exchange rate and the Canadian dollar would appreciate. |
Question 49 |
A | $4500 |
B | $3000 |
C | $20,000 |
D | $5000 |
E | $10,000 |
Question 50 |
A | Individuals who earn high incomes |
B | Landlords who own apartments in cities with rent controls |
C | Banks that have loaned all excess reserves at a fixed interest rate. |
D | Individuals who have borrowed money at fixed interest rates. |
E | Individuals who have fixed retirement incomes |
Question 51 |
Total population = 44 million
Population under 18 = 8 million
Non-residents (visitors) not counted in total population = 4 million
A | Not enough information is provided to answer this question. |
B | 5 million |
C | 44 million |
D | 40 million |
E | 36 million |
Question 52 |
A | Decrase in government spending and increase in tax rates. |
B | Decrease in government spending and decrease in tax rate. |
C | Increase in government spending and increase in tax rate. |
D | Increase in government spending and decrease in tax rate. |
Question 53 |
A | $1160 |
B | $60 |
C | $940 |
D | None |
E | $30 |
Question 54 |
A | 30 |
B | 70 |
C | 56 |
D | 5 |
Note 50 loonies = $50; suppose it is 50 ten dollar bills, then you must multiply 50 x 10 = $500 to obtain the value for M. M variable is the monitory value of the money itself not how many coins/notes in circulation.
Question 55 |
A | Canadian consumers will buy more domestic goods and more foreign goods. |
B | Canadian consumers will buy fewer domestic goods and more foreign goods. |
C | Canadian consumers will buy fewer domestic goods and fewer foreign goods. |
D | Canadian consumers will buy more domestic goods and fewer foreign goods. |
Question 56 |
A | Increasing inflation would lead to increase in nominal interest rate. |
B | Increasing inflation would lead to decrease in nominal interest rate. |
C | Increase in 1% point of inflation would result in increase in 2% point in nominal interest rate. |
D | There is no relationship between the nominal interest rate and inflation. |
E | Increase in 1% point of inflation would result in decrease in 2% point in nominal interest rate. |
Question 57 |
A | Types of monitory controls by the government. |
B | Changes in the inflation rate. |
C | Depreciation of the value of fiat money. |
D | Appreciation of the value of fiat money. |
Question 58 |
Country | Currency | Currency per Canadian $ | Canadian Price Index | Currency Price Index |
Bolivia | Boliviano | 5.00 | 100 | 500 |
Japan | Yen | 100.00 | 100 | 20,000 |
Morocco | Dirham | 10.00 | 100 | 2000 |
Thailand | Baht | 30.00 | 100 | 2500 |
Australian | Dollar | 2.00 | 100 | 350 |
A | Bolivia and Morocco |
B | Thailand and Australia |
C | Japan, Morocco and Thailand |
D | Japan |
E | Bolivia |
Question 59 |
A | Increase in nominal exchange rate and the Canadian dollar would depreciate. |
B | Increase in nominal exchange rate and the Canadian dollar would appreciate. |
C | Decrease in nominal exchange rate and the Canadian dollar would appreciate. |
D | Decrease in nominal exchange rate and no ambiguous change to the Canadian dollar. |
E | Decrease in nominal exchange rate and the Canadian dollar would depreciate. |
Question 60 |
A | Contractionary monetary environment. |
B | Increase in public confidence in the economy. |
C | Increase in money supply. |
D | Increase in unemployment. |
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Credits: Based on the excellent class notes provided by, Dr. Peter Tracey during Fall 2015 and textbook ISBN-978-0-17-653085-3.
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