Question 1

In 2009,the highest unemployment duration in Canada was for workers aged

Accepted Answer

A)   15 to 24.
B)   25 to 34.
C)   35 to 44.
D)   45 to 54.
E)   55 to 64.F) B) and C)
G) A) and D)

Question 2

Economic activity moves through a period of expansion to a _______ and then moves into a period of _______ until it reaches a _______.

Accepted Answer

A)   peak;expansion;trough
B)   peak;recession;trough
C)   trough;expansion;peak
D)   trough;recession;peak
E)   peak;recession;peakF) A) and C)
G) A) and B)

Question 3

The economy of Alpha operates according to Okun's law.In Alpha,potential GDP equals $500 billion,actual GDP equals $520 billion,and the natural rate of unemployment is 5%.What is the actual rate of unemployment in Alpha?

Accepted Answer

A)   3%.
B)   4%.
C)   5%.
D)   6%.
E)   7%.F) C) and E)
G) C) and D)

Question 4

The amount of output produced when resources are used at normal rates is called

Accepted Answer

A)   a recessionary gap.
B)   an expansion.
C)   an output gap.
D)   potential output.
E)   a boom.F) A) and E)
G) A) and C)

Question 5

If the actual rate of unemployment is 7%,what is the natural rate of unemployment if output is 2% above potential?

Accepted Answer

A)   4%.
B)   5%.
C)   6%.
D)   7%.
E)   8%.F) B) and E)
G) C) and D)

Question 6

If the actual rate of unemployment is 5%,what is the natural rate of unemployment if output is 4% below potential?

Accepted Answer

A)   3%.
B)   4%.
C)   5%.
D)   6%.
E)   7%.F) A) and B)
G) C) and E)

Question 7

Recessions in the U.S.have a major impact on the

Accepted Answer

A)   automobile sector of the Canadian economy.
B)   manufacturing sector of the Canadian economy.
C)   services sector of the Canadian economy.
D)   mining sector of the Canadian economy.
E)   Canadian economy as a wholE.F) A) and B)
G) A) and C)

Question 8

Which of the following statements is NOT true about the labour market during economic fluctuations?

Accepted Answer

A)   The unemployment rate rises during recessions.
B)   The unemployment rate drops during expansions.
C)   The part of unemployment that is associated with recessions is called recessional unemployment.
D)   Real wages grow slowly or decline during recessions.
E)   Workers are less likely to receive promotions during recessions.F) B) and E)
G) A) and C)

Question 9

In Macroland,potential output equals $100 trillion and the natural rate of unemployment is 4%.If the actual unemployment rate is 5%,then the output gap equals

Accepted Answer

A)   - $2 trillion.
B)   - $1 trillion.
C)   $1 trillion.
D)   $2 trillion.
E)   $9 trillion.F) A) and E)
G) A) and D)

Question 10

Workers in ________ industries are more likely than workers in ________ industries to lose their jobs during a recession.

Accepted Answer

A)   automotive;manufacturing
B)   manufacturing: automotive
C)   service;durable
D)   durable;non-durable
E)   non-durable;durableF) A) and B)
G) A) and C)

Question 11

In an economy,nominal GDP is $4,000 billion,the actual unemployment rate is 8%,and the natural rate of unemployment is 6%.According to Okun's law,there will be

Accepted Answer

A)   $80 billion lost in potential output.
B)   $100 billion lost in potential output.
C)   $160 billion lost in potential output.
D)   $300 billion lost in potential output.
E)   $400 billion lost in potential output.F) C) and E)
G) All of the above

Question 12

If the output gap equals $50 million,then

Accepted Answer

A)   cyclical unemployment equals the sum of structural and frictional unemployment.
B)   there is an expansionary gap.
C)   there is no cyclical unemployment.
D)   potential GDP is greater than actual GDP.
E)   the actual rate of unemployment is greater than the natural rate of unemployment.F) None of the above
G) A) and D)

Question 13

The largest recessions tend to have an impact that

Accepted Answer

A)   stays within the local area,not affecting other cities.
B)   stays within the province,not affecting other provinces.
C)   stays within the region,not affecting the rest of the country.
D)   stays within the country,not affecting the rest of the world.
E)   is global,spreading from country to country.F) A) and B)
G) A) and E)

Question 14

A supply and demand model predicts that prices ________,while in most markets,prices ________.

Accepted Answer

A)   adjust slowly over time;change constantly
B)   change constantly;adjust slowly over time
C)   adjust slowly over time;adjust slowly over time
D)   change constantly;change constantly
E)   not change;adjust slowly over timeF) B) and E)
G) B) and C)

Question 15

If the natural rate of unemployment equals 6% and the actual rate of unemployment equals 5%,then cyclical unemployment equals

Accepted Answer

A)   - 1%.
B)   0%.
C)   1%.
D)   6%.
E)   11%.F) A) and D)
G) C) and D)

Question 16

If the actual rate of unemployment is 5%,what is the natural rate of unemployment if output equals potential output?

Accepted Answer

A)   0%.
B)   3%.
C)   4%.
D)   5%.
E)   6%.F) A) and C)
G) A) and B)

Question 17

A period in which the economy is growing at a rate significantly below normal is called a(n)

Accepted Answer

A)   expansion.
B)   boom.
C)   peak.
D)   recession.
E)   trough.F) C) and D)
G) A) and B)

Question 18

If the actual rate of unemployment is 5%,what is the natural rate of unemployment if output is 4% above potential?

Accepted Answer

A)   4%.
B)   5%.
C)   6%.
D)   7%.
E)   8%.F) B) and E)
G) B) and D)

Question 19

A trough in the business cycle occurs when

Accepted Answer

A)   cyclical unemployment is at a minimum point.
B)   employment and output reach their lowest levels.
C)   the natural rate of unemployment is at a minimum point.
D)   structural and frictional unemployment are at their highest levels.
E)   inflation is at the highest level.F) D) and E)
G) B) and D)

Question 20

If the cyclical rate of employment equals - 1% and the actual rate of unemployment equals 8%,then the natural rate of unemployment must equal

Accepted Answer

A)   - 7%.
B)   0%.
C)   1%.
D)   7%.
E)   9%.F) B) and E)
G) A) and C)

Exam 7: Money, Prices and the Reserve Bank

If the actual rate of unemployment is 5%,what is the natural rate of unemployment if output equals potential output?

Correct AnswerverifiedShow Answer

Recessions in the U.S.have a major impact on the

Correct AnswerverifiedShow Answer

Workers in ________ industries are more likely than workers in ________ industries to lose their jobs during a recession.

Correct AnswerverifiedShow Answer

If the natural rate of unemployment equals 6% and the actual rate of unemployment equals 5%,then cyclical unemployment equals

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If the output gap equals $50 million,then

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A period in which the economy is growing at a rate significantly below normal is called a(n)

Correct AnswerverifiedShow Answer

If the cyclical rate of employment equals - 1% and the actual rate of unemployment equals 8%,then the natural rate of unemployment must equal

Correct AnswerverifiedShow Answer

The economy of Alpha operates according to Okun's law.In Alpha,potential GDP equals $500 billion,actual GDP equals $520 billion,and the natural rate of unemployment is 5%.What is the actual rate of unemployment in Alpha?

Correct AnswerverifiedShow Answer

If the actual rate of unemployment is 7%,what is the natural rate of unemployment if output is 2% above potential?

Correct AnswerverifiedShow Answer

A supply and demand model predicts that prices ________,while in most markets,prices ________.

Correct AnswerverifiedShow Answer

The largest recessions tend to have an impact that

Correct AnswerverifiedShow Answer

If the actual rate of unemployment is 5%,what is the natural rate of unemployment if output is 4% below potential?

Correct AnswerverifiedShow Answer

In Macroland,potential output equals $100 trillion and the natural rate of unemployment is 4%.If the actual unemployment rate is 5%,then the output gap equals

Correct AnswerverifiedShow Answer

Economic activity moves through a period of expansion to a _______ and then moves into a period of _______ until it reaches a _______.

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The amount of output produced when resources are used at normal rates is called

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A trough in the business cycle occurs when

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In an economy,nominal GDP is $4,000 billion,the actual unemployment rate is 8%,and the natural rate of unemployment is 6%.According to Okun's law,there will be

Correct AnswerverifiedShow Answer

Which of the following statements is NOT true about the labour market during economic fluctuations?

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If the actual rate of unemployment is 5%,what is the natural rate of unemployment if output is 4% above potential?

Correct AnswerverifiedShow Answer

In 2009,the highest unemployment duration in Canada was for workers aged

Correct AnswerverifiedShow Answer

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Workers in industries are more likely than workers in industries to lose their jobs during a recession.

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A supply and demand model predicts that prices ,while in most markets,prices .

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Economic activity moves through a period of expansion to a ___ and then moves into a period of _ until it reaches a _____.

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