11.Constant prices are used to correct distortions in nominal GDP that are due to:

• Inflation.
• Unemployment.
• Business cycles.
• All of the above.

12. The term "nominal income" refers to:

• Money income adjusted for any change in the price level.
• Real purchasing power.
• Real purchasing power deflated for rising prices.
• Money income measured in current dollars.

13. The Consumer Price Index is a measure of the:

• Index used to compute real GDP from nominal GDP.
• Change in the average price of goods and services made in Canada.
• Average price of consumer goods and services in the current period relative to their price in some base period.
• Annual inflation rate in the producers' goods market.

14. Suppose that the CPI is currently 200 and was 50 in 1950. Then, according to the CPI, $1 in 1950 could purchase the same amount of goods and services as what amount today?

• $5
• $4
• $1
• $0.25

15. How does output per worker change when capital per worker increases?

• It increases. This increase is larger at larger values of capital per worker.
• It increases. This increase is smaller at larger values of capital per worker.
• It increases. This increase is the same at all values of capital per worker.
• It decreases. This decrease is larger at larger values of capital per worker.

16. In which of the following types of investment do foreigners buy shares in domestic companies without actively managing them?

• Foreign direct investment
• Foreign portfolio investment
• Foreign capital investment
• Foreign indirect investment

17. Over time, the greatest contribution to economic growth comes directly from:

• Additional labour.
• Additional management.
• Additional capital.
• Research and development.