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