All Chapters ✅
Answers Included ✅
Chapter 01 9ce
1) Which of the following is NOT a central issue in macroeconomics?
A) How should the central bank of a country fight inflation?
B) What is responsible for high and persistent unemployment?
C) How do tax changes influence consumers' choices of what to buy?
D) What factors determine economic growth?
E) What can or should the government do to stabilize the economy?
2) Macroeconomics does NOT focus on
A) policies that affect consumption and saving
B) policies that affect the performance of healthcare providers
C) the determination of changes in wages and prices
D) the determination of interest rates
E) Policies that affect the inflation rate
3) Which of the following is a Macroeconomic issue?
A) The effect of agricultural subsidies on the price of milk on an individual farm
B) Differences between the market for skilled labour versus the market for unskilled
labour
C) Issues related to the structure and performance of the healthcare sector in one small
community
D) Policies that affect the level of aggregate consumption
E) issues related to the deregulation of the telecommunications industry
4) Which of the following is not a fact about the Canadian economy?
A) Over the past 60 years, the Canadian economy has grown at an average of 3.1% each
year.
B) The overall price level increased by about 20% over the past three decades.
C) Prices are more than doubled in the 1970s.
D) The unemployment rate may be twice as high in a bad year than it is in a good year.
E) The unemployment rate increased about 20% over each of the past three decades.
1
,5) In studying growth theory, we
A) assume that labour, capital, and raw materials are all used efficiently
B) assume that increased use of inputs cannot lead to a higher living standard
C) assume that technological advances cannot affect living standards
D) try to explain the reasons for recessions and booms
E) Assume that the level price is fixed
6) Which statement is true regarding the full employment of factors of production?
A) It implies that every individual in an economy has a job.
B) It represents a tangible, physical state of production.
C) It is an economic concept, not a physical one.
D) Everyone is working 16 hours per day, every day.
E) Everyone is working 12 hours per day, every day.
7) In studying growth, which of the following is a FALSE statement?
A) the very long run focuses on the growth of productive capacity
B) in the very long run, the productive capacity is assumed to be given
C) in the very short run, shifts in aggregate demand determine how much output is
produced
D) fluctuations in the rates of inflation and unemployment are important long-run issues
E) at the full-employment level of output, capital is not used 100 percent
8) Government intervention in economic activity will not lead to a change in the price level
A) in the short-run model
B) in the medium-run model
C) in the very long-run model
D) in the short-run and medium-run model
E) in the long-run model
9) Which of the following is true in the short run?
A) output is determined by both aggregate demand and aggregate supply
B) output is determined by aggregate demand alone
C) prices will change if aggregate supply shifts
D) price is determined by aggregate demand alone
E) output is determined by aggregate supply alone
2
,10) In the simple macro model of this chapter, the long-run AS-curve is
A) horizontal
B) vertical
C) upward-sloping
D) assumed to be completely price elastic
E) Either vertical or upward-sloping, depending on how fast prices adjust
11) In the very long-run AD-AS model, if the AD-curve shifts to the left, then
A) prices and output will both decrease
B) prices and output will both increase
C) prices will decrease but output will remain the same
D) output will decrease but prices will remain the same
E) output will increase but prices will decrease
12) If an increase in aggregate demand causes prices to increase slightly but output to increase
significantly, then
A) the AS-curve must be very flat
B) the AD-curve must be very steep
C) the AD- and AS-curves must both be very steep
D) we must be looking at the very long-run AD-AS model
E) we must be looking at the short-run AD-AS model
13) In the very long-run AD-AS model,
A) only fiscal policy can affect both output and prices
B) only monetary policy can affect both output and prices
C) monetary policy can affect output but not prices
D) active stabilization policy is ineffective in changing output
E) the unemployment rate is always assumed to be zero
14) If a shift in the AD-curve has no impact on the price level, then
A) the unemployment rate must be extremely low
B) the AD-curve must be vertical
C) the AS-curve must be horizontal
D) the AS-curve must be vertical
E) The AD-curve must be horizontal
3
, 15) In the medium run, if GDP goes down but the price level goes up,
A) the AD-curve must have shifted to the right
B) the AD-curve must have shifted to the left
C) the AS-curve must have shifted to the right
D) the AS-curve must have shifted to the left
E) the AD-curve and the AS-curve must have both shifted to the right
16) Which of the following is FALSE in the medium run?
A) a change in monetary policy can shift the AD-curve
B) a change in fiscal policy can shift the AD-curve
C) a change in fiscal policy can change output and prices
D) a change in monetary policy can change prices but not output
E) a change in labour productivity can shift the AS-curve
17) A change in which of the following will shift the AD-curve?
A) monetary or fiscal policy
B) the level of consumer confidence
C) the productive capacity of our economy
D) monetary or fiscal policy or the level of consumer confidence or the productive
capacity of our economy
E) monetary or fiscal policy or the level of consumer confidence
18) The position of the AS-curve depends on
A) fiscal policy
B) monetary policy
C) consumer confidence
D) the productive capacity of the economy
E) fiscal or monetary policy or consumer confidence
4
Answers Included ✅
Chapter 01 9ce
1) Which of the following is NOT a central issue in macroeconomics?
A) How should the central bank of a country fight inflation?
B) What is responsible for high and persistent unemployment?
C) How do tax changes influence consumers' choices of what to buy?
D) What factors determine economic growth?
E) What can or should the government do to stabilize the economy?
2) Macroeconomics does NOT focus on
A) policies that affect consumption and saving
B) policies that affect the performance of healthcare providers
C) the determination of changes in wages and prices
D) the determination of interest rates
E) Policies that affect the inflation rate
3) Which of the following is a Macroeconomic issue?
A) The effect of agricultural subsidies on the price of milk on an individual farm
B) Differences between the market for skilled labour versus the market for unskilled
labour
C) Issues related to the structure and performance of the healthcare sector in one small
community
D) Policies that affect the level of aggregate consumption
E) issues related to the deregulation of the telecommunications industry
4) Which of the following is not a fact about the Canadian economy?
A) Over the past 60 years, the Canadian economy has grown at an average of 3.1% each
year.
B) The overall price level increased by about 20% over the past three decades.
C) Prices are more than doubled in the 1970s.
D) The unemployment rate may be twice as high in a bad year than it is in a good year.
E) The unemployment rate increased about 20% over each of the past three decades.
1
,5) In studying growth theory, we
A) assume that labour, capital, and raw materials are all used efficiently
B) assume that increased use of inputs cannot lead to a higher living standard
C) assume that technological advances cannot affect living standards
D) try to explain the reasons for recessions and booms
E) Assume that the level price is fixed
6) Which statement is true regarding the full employment of factors of production?
A) It implies that every individual in an economy has a job.
B) It represents a tangible, physical state of production.
C) It is an economic concept, not a physical one.
D) Everyone is working 16 hours per day, every day.
E) Everyone is working 12 hours per day, every day.
7) In studying growth, which of the following is a FALSE statement?
A) the very long run focuses on the growth of productive capacity
B) in the very long run, the productive capacity is assumed to be given
C) in the very short run, shifts in aggregate demand determine how much output is
produced
D) fluctuations in the rates of inflation and unemployment are important long-run issues
E) at the full-employment level of output, capital is not used 100 percent
8) Government intervention in economic activity will not lead to a change in the price level
A) in the short-run model
B) in the medium-run model
C) in the very long-run model
D) in the short-run and medium-run model
E) in the long-run model
9) Which of the following is true in the short run?
A) output is determined by both aggregate demand and aggregate supply
B) output is determined by aggregate demand alone
C) prices will change if aggregate supply shifts
D) price is determined by aggregate demand alone
E) output is determined by aggregate supply alone
2
,10) In the simple macro model of this chapter, the long-run AS-curve is
A) horizontal
B) vertical
C) upward-sloping
D) assumed to be completely price elastic
E) Either vertical or upward-sloping, depending on how fast prices adjust
11) In the very long-run AD-AS model, if the AD-curve shifts to the left, then
A) prices and output will both decrease
B) prices and output will both increase
C) prices will decrease but output will remain the same
D) output will decrease but prices will remain the same
E) output will increase but prices will decrease
12) If an increase in aggregate demand causes prices to increase slightly but output to increase
significantly, then
A) the AS-curve must be very flat
B) the AD-curve must be very steep
C) the AD- and AS-curves must both be very steep
D) we must be looking at the very long-run AD-AS model
E) we must be looking at the short-run AD-AS model
13) In the very long-run AD-AS model,
A) only fiscal policy can affect both output and prices
B) only monetary policy can affect both output and prices
C) monetary policy can affect output but not prices
D) active stabilization policy is ineffective in changing output
E) the unemployment rate is always assumed to be zero
14) If a shift in the AD-curve has no impact on the price level, then
A) the unemployment rate must be extremely low
B) the AD-curve must be vertical
C) the AS-curve must be horizontal
D) the AS-curve must be vertical
E) The AD-curve must be horizontal
3
, 15) In the medium run, if GDP goes down but the price level goes up,
A) the AD-curve must have shifted to the right
B) the AD-curve must have shifted to the left
C) the AS-curve must have shifted to the right
D) the AS-curve must have shifted to the left
E) the AD-curve and the AS-curve must have both shifted to the right
16) Which of the following is FALSE in the medium run?
A) a change in monetary policy can shift the AD-curve
B) a change in fiscal policy can shift the AD-curve
C) a change in fiscal policy can change output and prices
D) a change in monetary policy can change prices but not output
E) a change in labour productivity can shift the AS-curve
17) A change in which of the following will shift the AD-curve?
A) monetary or fiscal policy
B) the level of consumer confidence
C) the productive capacity of our economy
D) monetary or fiscal policy or the level of consumer confidence or the productive
capacity of our economy
E) monetary or fiscal policy or the level of consumer confidence
18) The position of the AS-curve depends on
A) fiscal policy
B) monetary policy
C) consumer confidence
D) the productive capacity of the economy
E) fiscal or monetary policy or consumer confidence
4
