MCQ Question If the economy booms in Canada while going into recession in other countries, the Canadian trade deficit will tend to A Increase B Decrease C Increase in the short run and decrease in the long run D Stay the same 2, Suppose the exchange rate between the Canadian dollar and the Japanese yen was $1 220 yen in 2012 In 2014, the exchange rate was $1 100 yen Refer to the above information Which one of the following might be a plausible explanation for the change in the dollar yen exchange rate in 2014 A Japan's growth of national income was more rapid than that of the Canadian economy during the period B Japan increased its purchases from Canada during the period C Japan's government devalued the yen during the period D During the period, Japan exported more to Canada than it imported from Canada 3, A deficit on the current account A means that a nation is not making any international transfers B normally causes a deficit on the capital account C has no relationship to the capital account D normally causes a surplus on the capital account 4, A basic criticism of supply side economics is that A higher taxes will reduce incentives to work, invest, and innovate B lower taxes will increase aggregate supply much more than they will increase aggregate demand C lower taxes will increase aggregate demand much more than they will increase aggregate supply thus creating inflation D empirical research clearly shows that incentives to work and invest vary directly with marginal tax rates 5, 10 LO S 8 8 8 Interest rate ( ) 6 Interest rate Interest rate 2 2 D2 2 0 100 200 300 400 100 200 300 400 100 200 300 400 500 600 Honey demanded Honey demanded Honey demanded supplied ( billions) ($ billions) ( billions)

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MCQ Question If the economy booms in Canada while going into recession in other countries, the Canadian trade deficit will tend to ______. A.Increase B.Decrease

MCQ Question

If the economy booms in Canada while going into recession in other countries, the Canadian trade deficit will tend to ______.

A.Increase
B.Decrease
C.Increase in the short run and decrease in the long run
D.Stay the same

2, Suppose the exchange rate between the Canadian dollar and the Japanese yen was $1 = 220 yen in 2012. In 2014, the exchange rate was $1 = 100 yen.

Refer to the above information. Which one of the following might be a plausible explanation for the change in the dollar-yen exchange rate in 2014?

A.Japan's growth of national income was more rapid than that of the Canadian economy during the period.
B.Japan increased its purchases from Canada during the period.
C.Japan's government devalued the yen during the period.
D.During the period, Japan exported more to Canada than it imported from Canada.

3, A deficit on the current account:

A.means that a nation is not making any international transfers.
B.normally causes a deficit on the capital account.
C.has no relationship to the capital account.
D.normally causes a surplus on the capital account.

4, A basic criticism of supply-side economics is that:

A.higher taxes will reduce incentives to work, invest, and innovate.
B.lower taxes will increase aggregate supply much more than they will increase aggregate demand.
C.lower taxes will increase aggregate demand much more than they will increase aggregate supply thus creating inflation.
D.empirical research clearly shows that incentives to work and invest vary directly with marginal tax rates.

10 LO S 8 8 8 + Interest rate (*) = 6 Interest rate Interest rate 2 2 D2 2 0 100 200 300 400 100 200 300 400 100 200 300 400 500 600 Honey demanded Honey demanded Honey demanded & supplied (# billions) ($ billions) (# billions)