1) What can directly change aggregate demand and long-run aggregate supply?

Select one:

a.

resource input prices.

b.

interest rates

c.

value of the Canadian dollar

d.

business investment

e.

GDP in the rest of the world (R.O.W.)

2) Which is not a role of the Bank of Canada?

Select one:

a.

issuing currency

b.

acting as banker to the government

c.

conducting monetary policy

d.

acting as banker to the chartered banks

e.

printing currency

3)Haley sold one of her watercolour paintings 5 years ago for $10,000, but hasn't sold another painting since. Painting kitchens for $20 an hour might be a smart choice for Haley.

Select one:

True

False

4) The language of output gaps - recessionary gaps and inflationary gaps -

Select one:

a.

applies only to economic growth.

b.

applies only to outcomes of demand shocks.

c.

does not apply to outcomes of demand shocks or supply shocks.

d.

applies only to outcomes of supply shocks.

e.

applies to outcomes of both demand shocks and supply shocks.

5)Phone data plans often charge a high price for daytime use and a lower price on evenings and weekends. An economist would say this is because

Select one:

a.

marginal benefits can decrease as circumstances change.

b.

total benefits decrease as you use more minutes.

c.

marginal benefits increase as you talk longer.

d.

not many people have cell phones these days.

e.

it is less expensive to provide service when it is dark outside.

6)If people eat more potato chips even though the price rises, it is likely that

Select one:

a.

supply increased.

b.

demand increased.

c.

potato chips make you fat.

d.

demand decreased.

e.

supply decreased.

7)Medical care in Canada is regulated by a

Select one:

a.

natural monopoly.

b.

government-appointed agency or board.

c.

government department.

d.

Crown corporation.

e.

professional association.

8)Voluntary trade solves the problem of scarcity.

Select one:

True

False

9)Competitive entrepreneurs prefer perfect competition rather than monopoly.

Select one:

True

False

10) When the Bank of Canada sells bonds, interest rates

Select one:

a.

rise, business investment decreases, and the Canadian dollar appreciates.

b.

fall, business investment decreases, and the Canadian dollar appreciates.

c.

fall, business investment increases, and the Canadian dollar appreciates.

d.

rise, business investment decreases, and the Canadian dollar depreciates.

e.

fall, business investment increases, and the Canadian dollar depreciates.

11) Aggregate demand increases if

Select one:

a.

the value of the Canadian dollar rises.

b.

GDP in R.O.W. increases.

c.

the price level falls.

d.

interest rates rise.

e.

the price level rises.

12) Marginal opportunity cost

Select one:

a.

is constant when some inputs are more productive than others.

b.

increases as you supply more.

c.

is constant when some inputs are less productive than others.

d.

increases as you supply less.

e.

decreases as you supply more.

13)There is a negative demand shock when

Select one:

a.

government reduces net taxes.

b.

interest rates rise.

c.

consumers become more optimistic.

d.

interest rates fall.

e.

government spending increases.

14) The economic force that causesoppositeeffects on the value of the Canadian dollar is changes in

Select one:

a.

world prices for Canadian resource exports.

b.

expectations.

c.

inflation rate differentials.

d.

Canadian real GDP.

e.

interest rate differentials.

15)Pizza Pizza developes a microwave pizza oven that cook a large pizza in 23 seconds. This cost-saving technology causes the price of pizza to

Select one:

a.

fall, and quantity demanded increases.

b.

fall, and quantity demanded decreases.

c.

fall, and demand decreases.

d.

rise, and quantity demanded increases.

e.

rise, and quantity demanded decreases.

16) Two politicians agree to run a clean campaign. "Let's stick to the high road and avoid negative television ads." According to game theory, this agreement will likely collapse.

Select one:

True

False

17) Marginal benefits are always larger than total benefits.

Select one:

True

False

18)East Westfalia reported these unemployment rates for 2015: cyclical 3 percent, seasonal 2 percent, frictional 5 percent and structural 4 percent. East Westfalia has a

Select one:

a.

full employment equilibrium.

b.

recessionary gap.

c.

inflationary gap.

d.

monetary squeeze.

e.

structural revolution.

19) In a barter economy with four products there are ________ unique relative prices.

Select one:

a.16

b.6

c.4

d.8

e.12

20) Markets overcome the problem of scarcity.

Select one:

True

False