Exam Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A high rate of growth of productivity is A) measured by looking at the growth in output per worker. B) associated with a large government budget deficit. C) associated with a decrease in the standard of living of a country. D) associated with a decrease in the unemployment rate. E) measured by looking at the growth in output per worker.
1)
2) An expansion represents: A) an increase in the unemployment rate. B) a simultaneous increase in economic activity and reduction in inflation. C) an increase in stock prices. D) a reduction in the unemployment rate. E) a decrease in output.
2)
3) Fluctuations refer to: A) movements in prices. B) deviations of stock prices from their fundamental values. C) changes in stock prices. D) an increase in the unemployment rate. E) alternating periods of expansions and recessions.
3)
4) Policy makers can become concerned if the unemployment rate is too low because: A) stock prices will fall. B) inflation might increase. C) output will decrease. D) output will increase. E) an exchange rate crisis might occur.
4)
5) A comparison of the annual average growth rate of real output for the periods 1962 -1993 and the period from 1994 -2004 in Canada shows A) the growth rates have decreased. B) the growth rates are basically the same. C) the recent increase in growth rates is due to large increases in capital formation. D) the level of real output fell from 1962-1993. E) the level of real output fell from 1994-2004.
5)
6) Which of the following factors are identified by economists as causing higher unemployment in Europe relative to unemployment in North America? A) relatively low level of worker protection B) inadequate macroeconomic policies C) lower labour costs D) adequate macroeconomic policies E) relatively low unemployment benefits
6)
1
7) Which of the following countries by 2002 were included in the same common currency area? A) Japan and China B) Mexico and the United States C) Spain and France D) United Kingdom and France E) Canada and France
7)
8) At what point could the Euro be used as currency? A) January 1, 2004 B) January 1, 1998 C) January 1, 1999 D) January 1, 2002 E) January 1, 2000
8)
9) Which of the following conditions has NOT occurred in Japan in the past decade? A) deflation B) economic boom C) recession D) a reduction in the rate of growth of output E) a reduction in stock prices
9)
10) Deflation represents: A) an increase in the aggregate price level. B) a reduction in the aggregate price level. C) a reduction in output. D) an increase in the unemployment rate. E) a recession.
10)
11) The usual unemployment rate in Canada A) is usually around 20%. B) has fallen in the last 40 years. C) is usually around 10%. D) has risen in the last 40 years. E) rises in an expansion and falls in a recession.
11)
12) The unemployment rate in Canada A) is usually higher than the unemployment rate in Europe. B) is higher in a recession. C) is usually lower than the unemployment rate in the United States. D) is lower in a recession. E) is higher in an expansion.
12)
13) In Canada, government budget deficits A) declined after 1995. B) declined after 2004. C) declined after 1975. D) declined after 1985. E) declined after 1965.
13)
2
14)
14) In the United States, Canada and Europe in the 1990s relative to the 1970s A) all countries had large government budget deficits. B) all countries had relatively low unemployment rates. C) all countries had relatively rapid output growth. D) all countries had relatively low inflation. E) all countries had relatively high inflation. 15) In the past 25 years, the average rate of real growth of output in China has been A) 14%. B) 8%. C) 5%. D) 2%.
15) E) 12%.
16) A comparison of the annual average inflation rate for the periods 1962 -1993 and the period from 1994-2004 in Canada shows A) the recent increase is due to large open market operations. B) the inflation rates are basically the same. C) the inflation rates have decreased. D) the inflation rate fell from 1962-1993. E) the inflation rate increased from 1994 -2004.
16)
17) In the United States, the average price of a house fell by 20%. The behaviour of house prices is relevant because A) if the value of a house falls below the outstanding loan, bonds held by investment banks increase in value. B) if the value of a house falls below the outstanding loan, the borrower wants to repay the mortgage quickly. C) Americans felt poorer and reduced consumption. D) as houses fell in value, there are more reasons to build more new houses. E) if the value of a house falls below the outstanding loan, banks can make more profits.
17)
18) The housing crisis in the United States is called the ʺsub-primeʺ mortgage meltdown. ʺSub -primeʺ borrowers are A) borrowers with relatively high incomes and risky jobs. B) borrowers with relatively low incomes and risky jobs. C) borrowers with average incomes and risky jobs. D) borrowers with relatively high incomes and non-risky jobs. E) borrowers with relatively low incomes and non-risky jobs.
18)
19) Chinaʹs rapid growth in recent years is often claimed to be responsible for A) the recession in Japan. B) housing crisis in the United States. C) the formation of the European Union. D) increases in commodity prices. E) budget deficits in Canada.
19)
20) The ratio of the real output per capita in China to the real output per capita in Japan ________ from ________ in 1972 to ________ in 2004 A) increased; 15.7 : 1; 4.6 : 1 B) decreased; 4.6 : 1; 15.7 : 1 C) increased; 0.21 : 1; 0.06 : 1 D) decreased; 0.06 : 1; 0.21 : 1 E) increased; 0.06 : 1; 0.21 : 1
20)
3
Answer Key Testname: UNTITLED1
1) A Skill: Recall
2) D Skill: Recall
3) E Skill: Recall
4) B Skill: Recall
5) B Skill: Recall
6) B Skill: Recall
7) C Skill: Recall
8) D Skill: Recall
9) B Skill: Recall
10) B Skill: Recall
11) D Skill: Recall
12) B Skill: Recall
13) A Skill: Recall
14) D Skill: Recall
15) B Skill: Recall
16) C Skill: Recall
17) C Skill: Recall
18) B Skill: Recall
19) D Skill: Recall
20) E Skill: Recall
4
