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