1) Real GDP uses

Select one:

a.

constant prices to value the quantities of product and services.

b.

quantities but does not use prices.

c.

prices for several years to value the quantities of product and services.

d.

quantities for several years to value the prices of product and services.

e.

constant quantities to value the prices of product and services.

2) Differences in opportunity costs are the key to mutually beneficial gains from trade.

Select one:

True

False

3) Failure to recognize the negative externality costs of producing electricity with coal-burning generators results in over-production of electricity.

Select one:

True

False

4)Quantitative easing

Select one:

a.

floods the financial system with debt.

b.

creates risks of inflation as the economy approaches potential GDP.

c.

replaces liabilities on chartered bank balance sheets with debt.

d.

makes it harder for chartered banks to make new loans.

e.

does all of the above.

5)When consumers' incomes increase, the price of an inferior product or service rises.

Select one:

True

False

6) Economics is about

Select one:

a.

how businesses make the best possible choices.

b.

how governments make the best possible choices.

c.

how choices interact in markets.

d.

how individuals make the best possible choices.

e.

all of the above.

7) You pay $10,000 for a one-year bond with an original value of $10,000 and a single fixed payment of $800 at the end of the year. You hold the bond until the year is up, but during that time, the market price of the bond falls to $8,000. The interest rate on your investment is

Select one:

a.

8 percent.

b.

higher than interest rates on similar bonds at the end of the year.

c.

80 percent.

d.

10 percent.

e.

100 percent.

8)When the economy has an inflationary gap, cyclical unemployment is probably

Select one:

a.

positive.

b.

healthy.

c.

negative.

d.

unethical.

e.

zero.

9) f the inflation rate is 10 percent, products that used to cost $80 cost ________ a year later.

Select one:

a.

$800

b.

$90

c.

$81

d.

$70

e.

$88

10) f C$1.00 = US$0.80, what is the reciprocal exchange rate?

Select one:

a.

US$1.00 = C$0.80

b.

C$0.80 = US$1.25

c.

US$1.00 = C$1.25

d.

C$0.80 = US$1.00

e.

US$1.00 = C$8.00

11) For a one-price price maker, raising the pricealways

Select one:

a.

decreases total revenues.

b.

decreases marginal revenues.

c.

decreases marginal costs.

d.

increases total revenues.

e.

increases marginal revenues.

12) During the Global Financial Crisis, all of the following measures fellexcept

Select one:

a.

economic growth.

b.

stock prices.

c.

asset prices.

d.

housing prices.

e.

unemployment.

13)If aggregate demand does not change, aggregate supply policies for economic growth

Select one:

a.

increase real GDP, increase potential GDP, and lower the price level.

b.

fail to produce economic growth.

c.

increase real GDP, do not change potential GDP, and decrease the price level.

d.

increase real GDP, do not change potential GDP, and do not change the price level.

e.

increase real GDP, increase potential GDP, and raise the price level.

14) Your demand will be moreelasticwhen

Select one:

a.

you are addicted to the product or service.

b.

close substitutes are hard to find.

c.

the product or service is essential to your survival.

d.

you spend a large fraction of your income on the product or service.

e.

there isn't much time to adjust your spending patterns.

15) When Navdeep transfers $1,000 from her savings account to her chequing account,

Select one:

a.

M1+ is unchanged and M2+ decreases.

b.

M1+ increases and M2+ decreases.

c.

M1+ is unchanged and M2+ is unchanged.

d.

M1+ increases and M2+ is unchanged.

e.

M1+ increases and M2+ increases.

Clear my choice

16) Implicit costs measure the opportunity costs of investing your own money or time.

Select one:

True

False

17) When the Canadian money supply increases, the

Select one:

a.

Canadian interest rates rise.

b.

velocity of money decreases.

c.

supply curve of Canadian dollars shifts leftward.

d.

demand curve for Canadian dollars shifts leftward.

e.

Canadian dollar appreciates in value.

18) When there is inflation,

Select one:

a.

average prices fall.

b.

the purchasing power of your savings rises.

c.

your standard of living falls if your income rises faster than the prices of what you buy.

d.

the purchasing power of your savings falls.

e.

the value of money rises.

19) Popeye's Parlour supplies both piercing and tattoo services. Higher prices for piercings cause Popeye's

Select one:

a.

supply of tattoos to increase.

b.

quantity supplied of tattoos to increase.

c.

quantity supplied of tattoos to decrease.

d.

supply of tattoos to decrease.

e.

quantity demanded of tattoos to increase.

20) 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

Select one:

a.

$15.

b.

$350.

c.

$65.

d.

$50.

e.

$400.