its mcq and short question answer.

19) If the Consumer Price Index chenges from 120 in year ene to 150 in yeae twe, the rae of inflation in the intervening yenr is A) 10 percent B) 12.5 percet 9 20 percent D) 25 percent E) 30 percent HORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 20 20) The Consumer Price Index tends to the true problem of inflation 28) Suppone that the nominal national tn e in oe c ry n d by 10 during the year, when infation wae S penont Theone the eal CDP A) fell by 10 penont B) fell by S pecent was unatfected D) rose by 5 penont rose by 10 percent 26) When a govemment changes its fiscal policy, it is A) baying and selling private bonds to increase or decrease the overnight lending rate B) changing tax rates to change nationnal income. c) increasing the money suPply to increase national income D) using govemment spending and taxes together with dchanging the money supply in order to achieve full employment E) changing government spending and/or tax rates to change national income. 26) SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 27) A provincial govemment introduces a new tax benefit for single mothers. This is an example of 27) fiscal policy MULTIPLECHOICE. Choose the one alternative that best completes the statement or answers the question. 28) Any central bank, including the Bank of Canada, can implement its monetary policy by directly influencing either A) aggregate demand; the interest rate. B) aggregate supply: aggregate demand. C) the price level; the interest rate D) money supply; money demand. E) the money supply; the interest rate. 28) or 29) In practice, the Bank of Canada implements its monetary policy by A) directly influencing the excess reserves in the commercial banking system. B) influencing the slope of the money demand curve. setting the money supply. D) directly influencing the price level. E) directly influencing the ovemight interest rate. 29) 30) If the Bank of Canada chooses to expand the money supply directly, it could A) sell some of its foreign currency assets. B) change the price level. C) reduce its deposits at commercial banks. D) sell government securities on the open market E) buy government securities on the open market. 30) 5 LO 19) the Con e Pre nde chang f inflation in the intervenng year in A) 10 pent 12.5 pert 920 percent D) 25 penomt 30 penomt 1 SHORT ANSWER Write the wond or phese that best mpletes each stament or anwes the qti 20) The Consmer Price Indes tends to the true problem of inflationI AULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the questiom 21) 21) Demand-pull inflation" refers to A) any inflation that is originally caused by a rightward shift of the AD curve but is maintained at a constant level by monetary validation B) only the inflation that results from an expansionary monetary policy. 9 any inflation that is originally caused by a rightwasrd shift of the AD eurve but is accelerating due to monetary validation. D) the inflation that results from a decrease in net exports E) the inflation that results from any inflationary gap caused by a rightward shift of the AD curve. 22) 22) "Cost-push inflation" refers to A) the increase in the price level that occurs when the excess demand for inputs pushes up input costs. B) the increase in the price level that occurs when there is excess supply of factors of production. C) inflation arising from a shortage of labour. D) any increase in the price level that results from an upward shift of the AD curve. E) inflation arising from a leftward shift of the AS curve that is not the result of excess demand for factors of production. TANSWER. Write the word or phrase that best completes each statement or answers the question. 23) 23) Extremely high inflation is called PLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 24) 4) Transfer payments are excluded from the calculation of GDP because A) it is difficult to assess the market value of a transfer payment. B) they do not represent the purchase of a good or a service. C) they do not generate additional income in the economy. D) they are small enough to ignore when computing the national accounts. F) ty are mui cunted as incune by any economic agent. 14) I 27 milon people ane employed nd 3 i p e a dwht e unemploymemt ate A) 11% ) 10% C)90% D) so% E) indeterminable from the information peovided 7he table beloo preeides maroecmene date for a hypethetical ecenomy. Dellar nonts are all i canatat-lar Year Actual COutput (billians of $) Potential Output Unemployment Rate (% of labour force) (billions od S) 2007 402 404 7.1 72 2008 408 411 2009 415 415 63 2010 420 418 5.9 2013 422 420 6.0 2012 420 423 70 6.3 2013 425 425 15) Refer to the table above. What is the unemplaymert rate when this economy is at fall employment? A)7.1% 15) C)5.9 % B) 6.0% D)70% )63% 16) Which of the following is the best exame A) A worker is laid off because his firm has to reduce production due to reduced demand B) Inflationary pressures have led to higher wages for all jobs. C)A worker quits her current job to search for a better one. of frictional unemployment? 16) D) An ironworker cannot find a job in Ottawa because all job vacancies are in Alberta E) Bank tellers are unable to find jobs due to technological advances in the banking system. 17) Which of the following is the best example of cyclical unemployment? A) An ironworker cannot find a job in Ottawa because all job vacancles are in Alberta. B) Inflationary pressures have led to higher wages for all jobs. C) Bank tellers are unable to find jobs due to technological advances in the banking system D) A worker quits her current job to search for a better one. E) A worker is laid off because his firm had to reduce production due to reduced demand 17) 18) Workers with experience and skills sometimes lose their jobs and become unemployed due to changing technology or market conditions, even while firms in other industries or regions are looking to hire more workers. This type of unemployment is called A) natural rate of unemployment. B) frictional unemployment C) cyclical unemployment. D) structural unemployment. E) seasonal unemployment. 1s) 25) Suppose that the nomnal natonal ecome in contry inc by 0 duning the year, when inftation was 5 pencent Therefone the eal CP A) Sell by 10 pm B) Sell by 5 peeomt was unaffected D) rose by 5 penomt ) rose by 10 percent 26) When a government changes its fiacal policy, it is Aj buying and selling private bonds to increase or decrease the overnight lending rate B) changing tax rates to change national income c increasing the money supply to increase national income. D) using govemment spending and taxes together with changing the money supply in order to achieve full employment ) changing govemment spending and/or tax rates to change national income. 26) SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 27) A provincial government introduces a new tax benefit for single mothers. This is 27) an example of, fiscal policy. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 28) Any central bank, including the Bank of Canada, can implement its monetary policy by directly influencing either aggregate demand; the interest rate, 28) or B) aggregate supply; aggregate demand. C) the price level; the interest rate. D) money supply; money demand. E) the money supply; the interest rate. 29) In practice, the Bank of Canada implements its monetary policy by A) directly influencing the excess reserves in the commercial banking system. B) influencing the slope of the money demand curve. C) setting the money supply. D) directly influencing the price level E) directly influencing the overnight interest rate. 29) 30) If the Bank of Canada chooses to expand the money supply directly, it could A) sell some of its foreign currency assets. B) change the price level. C) reduce its deposits at commercial banks. D) sell govemment securities on the open market. E) buy government securities on the open market. 30)