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