1. Your family buys a ten-year old house in Lower Mainland, British Columbia. Which of the following is true? This purchase:

Select one:

A.Counts towards Canadian GDP since the house in Canada.

B.Does not count towards Canadian GDP since it was already counted ten years ago.

C.Does not count towards Canadian GDP because house is an asset, not a product.

D.Counts towards Canadian GDP because the money you guy it with must have been earned in Canada.

2 .Within the context of the aggregate demand [AD]/aggregate supply [AS] model, recessionary gapconditions are characterized by the AD and the short run AS curve:

Select one:

A.Intersecting at the same real GDP level as the LAS curve.

B.Intersecting at a price level not found on the LAS curve.

C.Intersecting at a real GDP level to the right of the LAS curve.

D.Intersecting at a real GDP level to the left of the long run AS curve [LAS curve].

3 If the economy starts at its potential level of real GDP, and a price of a major input (which this country does not export) increases, the short run result is:

Select one:

A.Negative cyclical unemployment.

B.Stagflation.

C.Increased real GDP.

d deflation

4If the economy starts in long run equilibrium, and the foreign income of major trading partner increases, the short run result is:

Select one:

A.A leftward shift of short run AS and a lower real GDP.

B.A rightward shift of short run AS and a higher Y.

C.A rightward shift of LAS and an indeterminate change in the price level.

D.A rightward shift of AD and a higher real GDP.

5 .All else equal in the standard AD/AS model, macroeconomic policy that affects only AD can produce which pair of effectsat the same time?

Select one:

A.A decrease in P and a decrease in u.

B.A decrease in u and an increase in real GDP [Y].

C.An increase in unemployment [u] and the price level [P].

D.An increase in P and a decrease in Y