1. During the Global Financial Crisis, all of the following measures fell except A) housing prices. B) stock prices. C) unemployment. D) economic growth. E) asset prices. 2. When there is inflation, A) average prices fall. B) the value of money rises. C) your standard of living rises if your income rises faster than the prices of what you buy. D) the purchasing power of your savings rises. E) your standard of living falls if your income rises faster than the prices of what you buy. 3. In 2015, the country of Adanac produced 20 kilos of apples and 30 kilos of bananas. Both fruit were used only for final consumption and nothing else was produced. In 2015, a kilo of apples sold for $10 while a kilo of bananas sold for $5. Adanac's nominal GDP in 2015 was A) $65. B) $50. C) $15. D) $400. E) $350. 4. A business sells its output for $2,000. It pays $1,100 in wages, $500 for material bought from other businesses, and has profits of $400. Its value added is A) is $400. B) is $1,100. C) is $1,500. D) is $1,600. E) depends on whether it produces intermediate products. 5. Which shifts a macro production possibilities frontier inward? A) rising input prices B) falling input prices C) rising output prices D) falling output prices E) none of the above 6. In 2015, Adanac produced 20 kilos of apples and 30 kilos of bananas. Both fruits were used only for final consumption and nothing else was produced. In 2015, a kilo of apples sold for $5 while a kilo of bananas sold for $10. In 2016, Adanac produced only 10 kilos of apples but produced 40 kilos of bananas. Prices in 2016 were $6 per kilo of apples and $11 per kilo of bananas. The economic growth rate in real GDP between 2015 and 2016 was ________ percent. A) 50 B) 11 C) 25 D) 5.0 E) 12.5 7. In Gagaland, real GDP is $200 billion and potential GDP is $160 billion. Gagaland has a(n) A) inflationary gap of $40 billion. B) recessionary gap of $40 billion. C) growth rate of 40 percent. D) growth rate of 20 percent. E) growth rate of -25 percent. 8. In 2015, Adanac produced 20 kilos of apples and 30 kilos of bananas. Both fruits were used exclusively for final consumption and nothing else was produced. In 2015, a kilo of apples sold for $5 while a kilo of bananas sold for $10. Using the same prices, economists estimate that potential GDP is $500. The output gap is A) - $400. B) + $400. C) - $100. D) + $100. E) - $200. 9. The normal measurement of GDP overestimates economic well-being because it excludes A) spending on health. B) leisure time. C) the effects of pollution. D) non-market production. E) unreported home renovations. 10. Which factor, if included in the measurement of a country's GDP, would have an unclear effect (up or down) on well-being, or quality of life? A) unreported legal productive activities B) unreported tips for restaurant servers C) non-market production D) leisure E) environmental damage 11. Which type of unemployment is caused by international competition? A) frictional B) natural C) structural D) cyclical E) seasonal 12. Sylvia quit her job as a college teacher to maintain the family home and raise her six children. Her husband works as a doctor. Statistics Canada classifies Sylvia as A) underutilized. B) discouraged. C) not in the labour force. D) underappreciated. E) overutilized. 13. When there are part-time workers who wish to work full-time, the official unemployment rate A) rises when these workers find full-time jobs. B) falls when these workers find full-time jobs. C) overstates the unemployment problem. D) understates the unemployment problem. E) counts these workers as discouraged. 14. Including discouraged workers in the official unemployment rate will A) not change the official unemployment rate. B) lower the official unemployment rate. C) raise the official unemployment rate. D) raise the natural rate of unemployment. E) raise the full employment rate. 15. A country has a working-age population of 30 million, with 18 million employed and 2 million unemployed. 2 million of the employed are working part-time, and half of these persons wish to work full-time. The labour force participation rate is A) 10 percent. B) 11.1 percent. C) 60 percent. D) 63.3 percent. E) 66.7 percent. 16. When the economy has a recessionary gap, cyclical unemployment is probably A) negative. B) impossible. C) zero. D) healthy. E) positive. 17. Consumers in Studentland buy Pizza and Pepsi nothing else. Prices and quantities are shown in the table below. Year Slices of Pizza Price per Slice Cans of Pepsi Price per Can 2015 40 10 10 20 2016 60 12 20 24 Spending in 2015 was A) 720. B) 1,000. C) 1,200. D) 600. E) 120. 18. Gina loans George $1,000. George agrees to pay her $1,100 next year. They both expect an inflation rate of 4 percent. At the end of the year, the inflation rate turns out to be 5 percent. This unexpected change is A) good for George but bad for Gina. B) good for both George and Gina. C) bad for both Gina and George. D) good for Gina but bad for George. E) irrelevant, a deal is a deal. 19. The velocity of money is 5, real GDP is 100 and the money supply is 100. According to the quantity theory of money, a 20 percent increase in the money supply causes a A) 10 percent decrease in average prices. B) 10 percent increase in average prices. C) 5 percent decrease in real GDP. D) 20 percent decrease in velocity. E) 20 percent increase in average prices