Question 1

In many countries,economists adopt the rule that a recession is a period of at least _____ during which aggregate output falls.

Accepted Answer

A)   one quarter
B)   two consecutive quarters
C)   three consecutive quarters
D)   a full yearE) B) and C)
F) B) and D)

Question 2

When economists measure economic growth,they often use:

Accepted Answer

A)   the inflation rate.
B)   the unemployment rate.
C)   nominal GDP.
D)   real GDP.E) A) and D)
F) None of the above

Question 3

Use the following to answer questions: 
-(Figure: The Business Cycle) The movement from point B to C is called a(n) :

Accepted Answer

A)   trough.
B)   expansion.
C)   depression.
D)   peak.E) None of the above
F) All of the above

Question 4

Fiscal policy entails:

Accepted Answer

A)   setting the money supply.
B)   setting levels of taxation and/or government spending.
C)   setting interest rates in specific markets.
D)   correcting only recessionary problems.E) None of the above
F) B) and C)

Question 5

Recessions tend to be _____,and expansions tend to be _____.

Accepted Answer

A)   short;short
B)   long;long
C)   short;long
D)   long;shortE) C) and D)
F) A) and B)

Question 6

The modern macroeconomic tools used by the government are _____ policy and _____ policy.

Accepted Answer

A)   tax;antitrust
B)   fiscal;monetary
C)   monetary;exchange rate
D)   capital;labourE) A) and B)
F) A) and C)

Question 7

Long-run growth is the sustained upward trend in:

Accepted Answer

A)   aggregate output per person over several decades.
B)   the unemployment rate over time.
C)   interest rates over time.
D)   aggregate output per person over the business cycle.E) B) and C)
F) C) and D)

Question 8

Setting government spending and taxes in an effort to change overall spending in an economy called:

Accepted Answer

A)   fiscal policy.
B)   monetary policy.
C)   investment.
D)   the stock market.E) B) and D)
F) B) and C)

Question 9

An economic expansion in Canada is typically associated with a(n) :

Accepted Answer

A)   falling inflation rate.
B)   increase in the poverty rate.
C)   increase in output.
D)   decrease in corporate profits.E) B) and D)
F) B) and C)

Question 10

The economist whose writings in the 1930s argued that the cause of an economic depression is inadequate spending was:

Accepted Answer

A)   Herbert Hoover.
B)   John Maynard Keynes.
C)   Andrew Mellon.
D)   Joseph Schumpeter.E) All of the above
F) C) and D)

Question 11

Which statement about the Canada economy is FALSE?

Accepted Answer

A)   Since World War II,aggregate output has grown more slowly than the population.
B)   Since World War II,aggregate output has grown more rapidly than the population.
C)   Since World War II,macroeconomic policy has helped make the economy more stable.
D)   Long-run growth per capita is the key to higher wages and a rising standard of living.E) B) and C)
F) None of the above

Question 12

What do a rubber-necking traffic jam and the paradox of thrift have in common?

Accepted Answer

A)   Individual behavior has large negative consequences for the whole of society.
B)   Seemingly bad behavior ends up harming everyone.
C)   Seemingly careless behavior leads to good times for all.
D)   Government intervention can only make matters worse.E) A) and C)
F) B) and C)

Question 13

The sequence of business cycle phases is:

Accepted Answer

A)   peak,trough,expansion,recession.
B)   peak,expansion,trough,recession.
C)   peak,recession,trough,expansion.
D)   peak,expansion,recession,trough.E) B) and C)
F) A) and D)

Question 14

Changing interest rates is an example of _____ policy.

Accepted Answer

A)   fiscal
B)   tax
C)   monetary
D)   exchange rateE) C) and D)
F) B) and C)

Question 15

Which one of the following measures long-run economic growth?

Accepted Answer

A)   a rise in employment
B)   an increase in the money supply
C)   a sustained increase in the production of goods and services
D)   an increase in the labour forceE) None of the above
F) A) and D)

Question 16

When an economy is operating between a trough and a peak of the business cycle,it is in:

Accepted Answer

A)   an expansion.
B)   a contraction.
C)   a short-run condition.
D)   the beginning of a fall in aggregate spending.E) A) and B)
F) None of the above

Question 17

Which two types of policy are considered to be macroeconomic?

Accepted Answer

A)   monetary and fiscal policy
B)   monetary and regulation policy
C)   fiscal and regulation policy
D)   fiscal policy and price controlsE) All of the above
F) None of the above

Question 18

Fiscal policy attempts to affect the overall level of spending through:

Accepted Answer

A)   changes in the inflation rate.
B)   changes in the quantity of money or the interest rate.
C)   changes in tax policy or government spending.
D)   discretionary regulation of profits and wages.E) A) and D)
F) A) and B)

Question 19

For the past several months,per capita output has increased at a slower and slower rate.Over the same period,the unemployment rate has been falling,but it appears that both have leveled off.Where in the business cycle is the economy?

Accepted Answer

A)   peak
B)   recession
C)   trough
D)   expansionE) A) and B)
F) B) and C)

Question 20

Per capita economic growth is:

Accepted Answer

A)   growth per unit of capital.
B)   growth per person.
C)   always accelerated during a business cycle.
D)   a sustained increase in interest rates.E) A) and B)
F) B) and C)

Exam 6: Macroeconomics: the Big Picture

Which statement about the Canada economy is FALSE?

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When an economy is operating between a trough and a peak of the business cycle,it is in:

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When economists measure economic growth,they often use:

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Setting government spending and taxes in an effort to change overall spending in an economy called:

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Fiscal policy attempts to affect the overall level of spending through:

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Which one of the following measures long-run economic growth?

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The economist whose writings in the 1930s argued that the cause of an economic depression is inadequate spending was:

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An economic expansion in Canada is typically associated with a(n) :

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Which two types of policy are considered to be macroeconomic?

Correct AnswerverifiedShow Answer

The sequence of business cycle phases is:

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Long-run growth is the sustained upward trend in:

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The modern macroeconomic tools used by the government are _____ policy and _____ policy.

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Fiscal policy entails:

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In many countries,economists adopt the rule that a recession is a period of at least _____ during which aggregate output falls.

Correct AnswerverifiedShow Answer

Per capita economic growth is:

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Use the following to answer questions: -(Figure: The Business Cycle) The movement from point B to C is called a(n) :

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Changing interest rates is an example of _____ policy.

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Recessions tend to be _____,and expansions tend to be _____.

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For the past several months,per capita output has increased at a slower and slower rate.Over the same period,the unemployment rate has been falling,but it appears that both have leveled off.Where in the business cycle is the economy?

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What do a rubber-necking traffic jam and the paradox of thrift have in common?

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The modern macroeconomic tools used by the government are _ policy and _ policy.

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Recessions tend to be _,and expansions tend to be _.

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