EC250 Final Exam
Study online at https://quizlet.com/_htiobs
1. 1. The biggest economic problem at present is
a) decline in output
b) high inflation
c) bear market in stocks
d) high unemployment: b) high inflation
2. 2. The effect of last two recession on the US unemployment was, compared
to unemployment in Canada
a) greater in both the Pandemic and the Great recessions
b) greater in the Pandemic recession but not in the Great recession
c) smaller in the Pandemic recession but greater in the Great recession
d) smaller in both the Pandemic and the Great recessions: a) greater in both the Pandemic
and the Great recessions
3. 3. Soft landing is:
a) return of the economy to normal, without a recession
b) gradual reduction in inflation, at the cost of a recession
c) return of inflation to the Bank of Canada target over several years
d) rapid return of inflation to the Bank of Canada target (within a year): a) return
of the economy to normal, without a recession
4. 4. When inflation in Canada reached around 8%, the Bank of Canada
a) always raised the Bank rate at least 2% above the rate of inflation
b) in the past, Bank of Canada raised the Bank rate substantially, but never
above 6%
c) Bank of Canada raised the Bank rate to over 14%, except for the current
situation
d) Bank of Canada raised the Bank rate substantially, except for the current
situation: d) Bank of Canada raised the Bank rate substantially, except for the current situation
5. 5. The boom in housing in the U.S. prior to the Great Recession
a) Was not as large as the boom in housing in Canada
, EC250 Final Exam
Study online at https://quizlet.com/_htiobs
b) Was caused in part by the decline in lending standards
c) Was caused in part by securitization which reduced risk to banks from
nonperforming mortgages
d) Only b) and c) are true: d) Only b) and c) are true
6. 6. Federal deficit, in the Pandemic recession
a) was about the same as in the Great recession
b) was smaller than in the Great recession
c) was around 5 times greater than in the Great recession
d) was twice greater than in the Great recession: c) was around 5 times greater than in the
Great recession
7. 7. The reduction in interest rates in Canada
a) was smaller in the Pandemic recession than during the Great recession,
because of zero lower bound
b) was smaller in the Great recession than during the Pandemic recession,
because of zero lower bound
c) led to negative policy rate in Canada during the Pandemic recession
d) led to negative policy rate in the US during the Great recession: a) was smaller in
the Pandemic recession than during the Great recession, because of zero lower bound
8. 8. When Lehman Brothers failed, the result was a panic in the credit market
and it was difficult to obtain credit. As a result
a) investment declined
b) output fell
c) consumers became pessimistic about the future and cut consumption
d) all of the above: d) all of the above
9. 9. Quantitative easing
a) is a policy that permits banks to create a greater quantity of deposits
b) means that the central bank buys more short-term bonds
c) means that the central bank buys assets of longer maturity, as well as
, EC250 Final Exam
Study online at https://quizlet.com/_htiobs
non-government assets
d) none of the above: c) means that the central bank buys assets of longer maturity, as well as non-govern-
ment assets
10. 10. The Human Development Index includes
a) income, life expectancy at birth and education
b) income, life expectancy at birth and average age at retirement
c) income, life expectancy at birth and proportion of income spent on health
care
d) income and education: a) income, life expectancy at birth and education
11. 11. A couple buys a house, putting down 10% of the total. This means that
their leverage is
a) 10
b) 11
c) 90
d) none of the above: a) 10
12. 12. A couple buys a house, putting down 10% of the total. The value of the
house increases by 20%. This means that the return on the down payment is
a) 10%
b) 20%
c) 100%
d) 200%: d) 200%
House is 100, down payment is 10, mortgage is 90. The value of the house increases 20% to 120; mortgage is 90, own
money is 30. Return: 20 on 10 down payment = 200%
13. 13. GDP does not include
a) household work
b) effects on the environment
c) harmful activities
d) only a) and b) are true: d) only a) and b) are true
Study online at https://quizlet.com/_htiobs
1. 1. The biggest economic problem at present is
a) decline in output
b) high inflation
c) bear market in stocks
d) high unemployment: b) high inflation
2. 2. The effect of last two recession on the US unemployment was, compared
to unemployment in Canada
a) greater in both the Pandemic and the Great recessions
b) greater in the Pandemic recession but not in the Great recession
c) smaller in the Pandemic recession but greater in the Great recession
d) smaller in both the Pandemic and the Great recessions: a) greater in both the Pandemic
and the Great recessions
3. 3. Soft landing is:
a) return of the economy to normal, without a recession
b) gradual reduction in inflation, at the cost of a recession
c) return of inflation to the Bank of Canada target over several years
d) rapid return of inflation to the Bank of Canada target (within a year): a) return
of the economy to normal, without a recession
4. 4. When inflation in Canada reached around 8%, the Bank of Canada
a) always raised the Bank rate at least 2% above the rate of inflation
b) in the past, Bank of Canada raised the Bank rate substantially, but never
above 6%
c) Bank of Canada raised the Bank rate to over 14%, except for the current
situation
d) Bank of Canada raised the Bank rate substantially, except for the current
situation: d) Bank of Canada raised the Bank rate substantially, except for the current situation
5. 5. The boom in housing in the U.S. prior to the Great Recession
a) Was not as large as the boom in housing in Canada
, EC250 Final Exam
Study online at https://quizlet.com/_htiobs
b) Was caused in part by the decline in lending standards
c) Was caused in part by securitization which reduced risk to banks from
nonperforming mortgages
d) Only b) and c) are true: d) Only b) and c) are true
6. 6. Federal deficit, in the Pandemic recession
a) was about the same as in the Great recession
b) was smaller than in the Great recession
c) was around 5 times greater than in the Great recession
d) was twice greater than in the Great recession: c) was around 5 times greater than in the
Great recession
7. 7. The reduction in interest rates in Canada
a) was smaller in the Pandemic recession than during the Great recession,
because of zero lower bound
b) was smaller in the Great recession than during the Pandemic recession,
because of zero lower bound
c) led to negative policy rate in Canada during the Pandemic recession
d) led to negative policy rate in the US during the Great recession: a) was smaller in
the Pandemic recession than during the Great recession, because of zero lower bound
8. 8. When Lehman Brothers failed, the result was a panic in the credit market
and it was difficult to obtain credit. As a result
a) investment declined
b) output fell
c) consumers became pessimistic about the future and cut consumption
d) all of the above: d) all of the above
9. 9. Quantitative easing
a) is a policy that permits banks to create a greater quantity of deposits
b) means that the central bank buys more short-term bonds
c) means that the central bank buys assets of longer maturity, as well as
, EC250 Final Exam
Study online at https://quizlet.com/_htiobs
non-government assets
d) none of the above: c) means that the central bank buys assets of longer maturity, as well as non-govern-
ment assets
10. 10. The Human Development Index includes
a) income, life expectancy at birth and education
b) income, life expectancy at birth and average age at retirement
c) income, life expectancy at birth and proportion of income spent on health
care
d) income and education: a) income, life expectancy at birth and education
11. 11. A couple buys a house, putting down 10% of the total. This means that
their leverage is
a) 10
b) 11
c) 90
d) none of the above: a) 10
12. 12. A couple buys a house, putting down 10% of the total. The value of the
house increases by 20%. This means that the return on the down payment is
a) 10%
b) 20%
c) 100%
d) 200%: d) 200%
House is 100, down payment is 10, mortgage is 90. The value of the house increases 20% to 120; mortgage is 90, own
money is 30. Return: 20 on 10 down payment = 200%
13. 13. GDP does not include
a) household work
b) effects on the environment
c) harmful activities
d) only a) and b) are true: d) only a) and b) are true
