ECON FINAL PRAC

1.

1 point

Changes in the money supply influence the level of GDP through changes in:

the average price level

the velocity of money

consumer incomes

the interest rate

2.

1 point

Which of the following is most likely to be a fixed cost?

property taxes

wages

energy

transportation

3.

1 point

If the federal government owes money to individuals in other countries:

it is part of gross debt but not included in net debt

it is not recorded in the official debt statement

it is normally at higher interest rates than money borrowed in Canada

the payments on the debt are affected by changes in the foreign exchange value of the Canadian dollar

4.

1 point

Theories developed by economists:

need 100 percent backing from fellow economists before being included in economics textbooks

are not the result of laboratory research and are therefore useless

are never applicable to real-world situations

are only applicable to real-world situations when certain conditions exist

5.

1 point

Which of the following would cause an increase in the equilibrium price level?

an increase in the interest rate

a decrease in government spending

in increase in imports

a decrease in taxes

6.

1 point

The demand for Canadian dollars on foreign-exchange markets will increase if:

the foreign-exchange value of the Canadian-dollar increases

more Canadians decide to travel to the United States for a holiday

the prices of Canadian resources fall in relation to the prices of resources in other countries

Canada increases the size of its peace-keeping forces around the globe

7.

1 point

If interest rates have been lowered substantially and increases in spending have not come about, then lowering the rate further in unlikely to encourage spending, this is known as:

the Fisher equation of exchange

an automatic stabilizer

interest rate inelasticity

a liquidity trap

8.

1 point

The money supply expands whenever:

you put money in a demand deposit

banks lend out money

you put money in a savings deposit

bank loans are repaid

9.

1 point

The major source of tax revenue for the municipal government is:

property taxes

corporation income taxes

sales taxes

personal income taxes

10.

1 point

The Laffer curve depicts the relationship between:

tax rates and government spending

tax rates and tax revenue

tax rates and inflation

tax rates and unemployment

11.

1 point

Chartered banks in Canada receive their charter from:

the Inspector-General of Banks

Parliament

the governor of the Bank of Canada

the minister of finance

12.

1 point

The only grocery store in a town of 1000 is considered to operate as:

an industry with many differentiated sellers

a monopoly

an oligopoly

a perfectly competitive firm

13.

1 point

If consumers expect gold prices to increase in the future:

they will be willing to buy more gold now; however, the demand curve for gold will remain the same

they will be willing to buy more gold now, causing the demand curve to shift to the right

they will reduce their gold purchases, causing the demand curve for gold to shift to the left

they will reduce their gold purchases; however, the demand curve for gold will remain the same

14.

1 point

If all inputs in a production process were doubled and output also doubled, it would be an example of:

economies of scale

diseconomies of scale

specialization

constant returns to scale

15.

1 point

As your income increases, marginal tax rates under a progressive income-tax system:

increase

may remain constant, or may increase, depending on your income-tax bracket

decrease

remain constant

16.

1 point

When drawing a demand curve for cars, we keep which of the following constant?

price expectations, incomes, and the price of cars

incomes, tastes, and the price of products that are substitutes for cars

income, the price of cars, and the price of products complementary to cars

incomes, tastes, and the price of cars

17.

1 point

If Canada increased its tariff on imported automobiles, those most likely to benefit would be:

Canadian automobile producers

Canadian consumers

Canadian importers of automobiles

foreign exporters of automobiles

18.

1 point

What type of government intervention is required to eliminate a surplus in the egg market when there is a price floor in place?

subsidize the buyer with vouchers

use a quota to restrict egg production

subsidize the seller with vouchers

reduce taxation on egg production

19.

1 point

Marginal cost means:

the increase in total costs associated with hiring one more worker

the increase in fixed costs from one short-run situation to another

the increase in total costs associated with producing one more unit of output

the difference between actual production costs and the lowest level of average costs

20.

1 point

Which of the following has led to an increase in the NAIRU in Canada?

decreasing labour force participation rates

increasing rate of productivity improvements among Canadian workers

changes in monetary policy

increase in foreign trade and deregulation of certain industries

21.

1 point

Your opportunity of taking an economics course is:

the cost of going skiing instead of taking the course

the tuition paid for the course

the net benefit of taking the course

the net benefit of going skiing instead of taking the course

22.

1 point

The type of crown corporation that is expected to find itself is:

a departmental corporation

proprietary corporation

limited corporation

an agency corporation

23.

1 point

Which of the following characteristics apply to perfect competition?

firms with market power

non-price competition occurs

many small firms

barriers to entry exist

24.

1 point

Which of the following industries is the best example of many differentiated sellers?

airlines

electricity

fast-food restaurants

banking

25.

1 point

The demand for a product will be more elastic:

the smaller the percentage of one's budget spent on it

the shorter the time period under consideration

the greater the number of substitutes for it

if it is a necessity

26.

1 point

If you grow vegetables in your garden, the enterprise is not included in GDP because:

actually the value of the vegetables in included in GDP

you are not a registered company

no one knows how much it cost you to grow them

if you do not sell them, there is no market price involved

27.

1 point

If an increase in the price of the product leads to a decrease in total revenue, the demand for this product is:

perfectly elastic

elastic

unitary elastic

inelastic

28.

1 point

As output increases, the ATC and AVC curves get closer together because:

average fixed costs become less and less

fixed costs disappear in the long run

none of the above in necessarily correct

marginal costs cause both to continually increase

29.

1 point

The extent to which a chartered bank can lend out money depends on its:

demand deposits

Bank of Canada regulations

demand and notice deposits

reserves

30.

1 point

Which of the following is NOT an investment item in national accounting terms?

construction of a nuclear-power plant

purchasing shares in a large manufacturing company

building a new school

an increase in the number of unsold cars on dealers' lots

31.

1 point

The Consumer Price Index is calculated:

weekly

yearly

semi-annually

monthly

32.

1 point

The simplest form of business enterprise is:

Crown corporation

corporation

partnership

sole proprietorship

33.

1 point

An increase in the general level of interest rates will:

increase the amount of money held for speculative purposes

cause people to hold more money

cause people to hold less money

increase the number of bank loans

34.

1 point

If your income increased from $30 000 to $40 000 per year, and your consumption increased from $28 000 to $34 000 per year, your MPC is:

0.3

0.1

0.6

0.4

35.

1 point

An example of proprietary corporation is:

Canada Post

the Bank of Canada

Canada Deposit Insurance Corporation

National Research Council

36.

1 point

The introduction of labour-saving machinery in the production of automobiles will:

increase the price of automobiles and quantity sold

decrease the price of automobiles and decrease the quantity sold

decrease the price of automobiles and increase the quantity sold

increase the price of automobiles but reduce the quantity sold

37.

1 point

Which of the following characteristics apply to oligopoly?

no barriers to entry exist

non-price competition occurs

many small firms

firms with no market power

38.

1 point

The principal assets of Canada's charted banks are:

Bank of Canada deposits and demand deposits

cash, loans, and government bonds

cash, loans, and demand deposits

cash, loans, and savings deposits

39.

1 point

As result of specialization in trade:

product prices in both countries fall

the total output of goods and services produced in the two countries involved increases

land value tend to fall

workers' wages everywhere increases

40.

1 point

If Canada specializes in wheat production and Mexico specializes in the production of radios, then:

radio prices will fall in both Canada and Mexico

radio prices will fall in Canada and rise in Mexico

radio prices will rise in both Canada and Mexico

radio prices will rise in Canada and fall in Mexico

41.

1 point

If the government were interested solely in raising revenue from the imposition of an excise tax, it should put the tax on a product that has:

an elastic demand

an inelastic demand

a perfectly elastic demand

a unitary elastic demand

42.

1 point

If marginal cost is increasing but is less than average total cost, average total cost is:

decreasing

increasing

impossible to tell without more information

remaining constant

43.

1 point

The major difference between monetary and fiscal policy is that:

monetary policy influences only the level of GDP, while fiscal policy can only influence government spending and taxation

monetary policy influences government spending, while fiscal policy influences government spending and taxation

monetary policy influences government spending, while fiscal policy influences taxation

monetary policy influences only the money supply while fiscal policy influences government spending

44.

1 point

Which of the following is NOT a characteristic of a command system?

private ownership of resources

centralized decision-making

reduced individual freedom

state ownership of resources

45.

1 point

A production-possibilities curve is an example of:

indirect or negative relationship

a linear relationship

a convex relationship

direct or positive relationship

46.

1 point

Canada's leading export in dollar terms is:

crude petroleum

passenger autos and chassis

wheat

lumber and sawmill products

47.

1 point

A federalist system of government means that:

only one level of government, the federal government, is necessary

two levels of government- federal and provincial- have jurisdiction over each citizen

all power rests with a central, or federal, government

the federal government can override decisions made by the provincial government

48.

1 point

The primary objective of Canada's immigration policy is:

the provision of skilled labour to the Canadian economy

the reuniting of families

the provision of a safe haven for refugees

ensuring the ethnic mix in the Canadian population

49.

1 point

A country that uses all its resources efficiently is presently producing 150 cars and 500 telephones. If it switches to producing 250 cars and 200 telephones, then the opportunity cost of the extra 100 cars produced is:

500 telephones

300 telephones

impossible to determine from the information given

200 telephones

50.

1 point

Economies of scale:

only occur in very large firms

result from worker specialization and the use of more efficient equipment

result in a decline in short-run average costs

take over when the worker specialization ends