{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ECON1010-SampleFinalExam - YORK UNIVERSITY FACULTY OF...

Info iconThis preview shows pages 1–24. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 6
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 8
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 10
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 12
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 14
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 16
Background image of page 17

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 18
Background image of page 19

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 20
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: YORK UNIVERSITY FACULTY OF LIBERAL ARTS AND PROFESSIONAL STUDIES DEPARTMENT OF ECONOMICS ECONOMICS 1010 3.0 INTRODUCTION TO MAC OECONOMICS k P FINAL MINATI N “n. ” Course Director: John Paschakis TOTAL WORTH: 60% STUDENT NAME: STUDENT NUMBER: INSTRUCTIONS: 1) This examination consists of eighty five (85) multiple choice questions. There is only one correct answer. No penalty for wrong answers. 2) Please answer all questions by marking the appropriate spaces on the computerized answer sheet. Use HB pencil only. 3) Time allowed: 150 minutes. Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) To measure GDP, Statistics Canada uses A) the expenditure approach. B) the income approach. C) the value-added approach. D) only A and B. E) A, B and C. 2) Which of the following items would be included in a current measure of GDP? A) Your labour in fixing a leaky pipe under your sink. B) The value of safety on the streets of your community. C) A professional gardener who regularly cuts your lawn. D) The illegal sale of a bag of marijuana. B) All of the above. 3) Unemployment caused by permanently decreased demand for horse—drawn carriages is an example of A) cyclical unemployment. B) seasonal unemployment. C) frictional unemployment. D) structural unemployment. E) discouraged unemployment. 4) If the economy is at full employment, then A) the entire population is employed. B) the entire labour force is employed. C) the only unemployment is frictional unemployment plus discouraged workers. D) the unemployment rate is less than 3 percent. E) all unemployment arises from normal frictions and structural change. 5) Economic growth is A) a sustained expansion of production possibilities measured as the increase in nominal GDP over a given period. B) a sustained expansion of consumption expenditure over a given period. C) always accompanied by a rising price level. D) equal to real GDP per capita multiplied by 70. E) a sustained expansion of production possibilities measured as the increase in real GDP over a given period. 6) Labour productivity is A) real GDP per hour of labour times the hours of work. B) real GDP per hour of labour times the population. C) the quantity of real GDP produced by an hour of labour. D) the rate of change in real GDP per hour of labour. E) none of the above. 1) 2) 3) 4) 5) 6) 7) When labour productivity increases, the demand for labour curve and the supply of 7) labour curve . A) shifts rightward; shifts rightward B) shifts rightward; does not shift C) shifts leftward; shifts rightward D) shifts leftward; does not shift E) shifts rightward; shifts leftward 8) Which of the following is not a source of economic growth? 8) A) increasing stock market prices B) better educated workers C) growing physical capital D) appropriate incentive system B) advances in technology 9) If the real interest rate rises from 3 percent to 5 percent, 9) A) the nominal interest rate falls. B) the demand for loanable funds curve shifts rightward. C) there is a movement up along the demand for loanable funds curve. D) the supply of loanable funds curve shifts rightward. B) there is a movement down along the supply of loanable funds curve. 10) A government budget deficit the demand for loanabl'e funds and investment. 10) A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) increases; rises or falls depending on the change in the Supply of loanable funds 11) Which one of the following is not a function of money? 11) A) medium of exchange B) means of payment C) store of value D) measure of liquidity E) unit of account 12) Which one of the following is not money? 12) A) A chequable deposit. B) Canadian currency. C) A credit card. D) A non—chequable deposit. E) A fixed term deposit. 13) A bank can create money by 13) A) selling some of its securities. B) increasing its reserves. C) lending its excess reserves. D) printing more cheques. E) converting reserves into securities. 14) Which one of the following will shift the demand for money curve rightward? A) An increase in real GDP. B) An increase in the price level. C) A decrease in the price level. D) An increase in the interest rate. E) A decrease in the interest rate. 15) Choose the correct statements. 1. The nominal exchange rate is the value of the Canadian dollar expressed in units of foreign currency per Canadian dollar. 2. The real exchange rate is the relative price of Canadian—produced goods and services to foreign—produced goods and services. 3. The nominal exchange rate is a meaSure of the quantity of the real GDP of other countries that a unit of Canadian real GDP buys. 4. The nominal exchange rate is the relative price of Canadian-produced goods and services to foreign—produced goods and services. A) Statements 1 and 2 are correct. B) Statements 3 and 4 are correct. C) Statements 1 and 3 are correct. D) Statements 2 and 4 are correct. E) Statements 2 and 3 are correct. 16) Which one of the following shifts the demand curve for dollars rightward? A) An increase in the demand for foreign goods by Canadians. B) A decrease in the demand for Canadian goods by foreigners. C) The dollar is expected to appreciate. D) The dollar is expected to depreciate. E) US. interest rates rise. 17) Which of the following shifts the supply curve of Canadian dollars rightward? A) An increase in the demand for foreign goods by Canadians. B) A decrease in the demand for Canadian goods by foreigners. C) The dollar is expected to appreciate. D) US. interest rates fall. E) None of the above. 18) Which one of the following would result in the dollar appreciating against the Japanese yen? A) a rise in the Canadian interest rate B) a fall in the Canadian interest rate C) a fall in the Japanese interest rate D) a decrease in the expected future Canadian exchange rate E) both A and C 19) Which of the following quotations best describes purchasing power parity? A) "The recent high Canadian interest rate has increased demand for the Canadian dollar." B) "The market feeling is that the Canadian dollar is overvalued and will likely depreciate." C) "The price of bananas is the same in Canada and the United States, adjusting for the exchange rate." D) "The expected depreciation of the Canadian dollar is currently lowering demand for it." E) None of the above. 14) 15) 16) 17) 18) 19) 20) Suppose that a US. dollar can earn interest of 5 percent a year in Chicago and a Canadian dollar can earn interest of 7 percent a year in Winnipeg. Will money flow from Chicago to Winnipeg? A) Yes, because the returns on money are higher in Winnipeg. B) No, because the outflow of US. funds would create a decrease in the US. dollar value, penalizing investors when they attempted to recover their funds. C) No, if investors expect that the Canadian dollar will appreciate by at least 2 percent per year. D) No, if investors expect the US. dollar to appreciate by at least 2 percent per year. E) No, as long as the US. dollar maintains higher purchasing power than the Canadian dollar. 21) Suppose that Canada's demand for imports decreases. All other things equal, A) the demand for Canadian dollars decreases and the supply of Canadian dollars increases. B) the demand for Canadian dollars increases. C) both the supply of and demand for Canadian dollars decreases. D) the supply of Canadian dollars decreases. E) the supply of Canadian dollars decreases and demand for Canadian dollars increases. 22) A change in the exchange rate, other things remaining the same, brings a A) change in the quantity of Canadian dollars demanded and a movement along the demand curve. B) change in the quantity of Canadian dollars demanded with no movement along the demand curve. C) shift of the demand curve for Canadian dollars with a movement along the demand curve. D) change in the quantity of Canadian dollars demanded and a shift of the demand curve. E) shift of the demand curve for Canadian dollars with no movement along the demand curve. 23) The exchange rate is volatile because A) government policy promotes interest rate fluctuation. B) the demand curve for foreign exchange is very flat. C) the demand curve for foreign exchange is very steep. D) the supply curve of dollars is vertical. E) the supply of dollars and demand for dollars are influenced by similar events. 24) Suppose initially Canada has all its international payments accounts in balance (no surplus or deficit). Then Canadian firms increase the amount they export to Japan, and the Japanese finance the increase by borrowing from Canada. In Canada everything else remaining the same there will now be a A) current account surplus and capital account surplus. B) current account surplus and capital account deficit. C) current account deficit and capital account surplus. D) current account deficit and capital account deficit. E) current account deficit and capital account balance. 25) Canada's balance of payments accounts are the A) current account, capital account, and net interest account. B) capital account, official settlements account, and merchandise trade account. C) current account, capital account, and official settlements account. D) official settlements account, current account, and net interest account. E) capital account, current account, and merchandise trade account. 20) 21) 22) 23) 24) 25) 26) Which one of the following newspaper quotations describes a shift of only the SAS curve? A) "The decrease in consumer spending may lead to a recession." B) "The increase in consumer spending is expected to lead to inflation, without any increase in real GDP." C) "Recent higher wage settlements are expected to cause higher inflation this year." D) "Growth has been unusually high the last few years due to more women entering the work force." E) "The recent tornadoes destroyed many factories in Calgary and Edmonton." 27) Which one of the following newspaper quotations describes a leftward shift of the LAS curve? A) "The decrease in consumer spending may lead to a recession." B) "The increase in consumer spending is expected to lead to inflation, without any increase in real GDP." C) "Recent higher wage settlements are expected to cause higher inflation this year." D) "Growth has been unusually high the last few years due to more women entering the work force." E) "The recent tornadoes destroyed many factories in Calgary and Edmonton." 28) Suppose there is an increase in the quantity of capital. As a result, the SAS A) and the LAS curves both shift leftward. B) and the LAS curves both shift rightward. C) curve does not shift but the [AS curve shifts rightward. D) curve does not shift but the LAS curve shifts leftward. E) shifts rightward, but the LAS curve does not shift. 29) An increase in oil prices to a country that is a net importer of oil shifts A) both the short-run aggregate supply and long-run aggregate supply curves rightward. B) both the short—run aggregate supply and long-run aggregate supply curves leftward. C) the short-run aggregate supply curve leftward, but leaves the long-run aggregate supply curve unchanged. D) the long—run aggregate supply curve rightward, but leaves the short—run aggregate supply curve unchanged. E) the short—run aggregate supply curve leftward, but shifts the long—run aggregate supply curve rightward. 30) Which of the following situations illustrates how monetary policy can influence aggregate demand? A) The Bank of Canada raises interest rates so people plan to buy less consumer durables. As a result, the aggregate demand curve shifts leftward B) Investors, anticipating an erosion of financial wealth due to inflation, decide to save more. As a result, aggregate demand decreases. C) The government reduces the goods and services tax. As a result, consumption expenditure increases and aggregate demand increases. D) The exchange rate value of the Canadian dollar rises. As a result, people living near the US-Canada border increase their imports of goods and net exports decrease. E) Both A and D are examples of monetary policy. 26) 27) 28) 29) 30) 31) Everything else remaining the same, an increase in foreign income A) increases Canada's aggregate supply. B) increases Canada's aggregate demand. C) decreases Canada's aggregate demand. D) creates a movement downward along Canada's aggregate demand curve. B) decreases Canada's aggregate supply. Use the figure below to answer the following questions. Price leave? P5525 32ml 7, 0 Real GDP ’0 (a) Price level 5145., , AD; 0 Real GDP 0 (‘l (3) Figure 26.2.1 Real GO? Real GE)? 32) Refer to Figure 26.2.1. Which graph illustrates what happens when the quantity of money increases? A) (a) B) (b) C) (C) D) (d) E) (a) and (b) 31) 32) Use the figure below to answer the following questions. Price lei/e? mine Eevel M5 LAS SASS mumwwm uwtm » E r .. g 0 Reef GDP 0 Real GD? aW« {a} (bi Price Imei Price Eevel £145 MMWWW 0 Rec? GDP 0 M (d) Figure 26.3.3 33) Refer to Figure 26.33. In which of the graphs would we predict that eventually the price level will 33) rise and real GDP will fall, all else remaining the same? A) (a) only B) (d) only C) (b) only D) (c) and (d) E) (c) only 34) We observe an increase in the price level and a decrease in real GDP. Which of the following is a 34) possible explanation? A) An increase in expected future profits. B) An increase in expected future income. C) An increase in factor prices. D) An increase in the quantity of capital. E) An increase in the quantity of money. 35) We observe an increase in the price level and an increase in real GDP. Which of the following is a 35) possible explanation? A) A decrease in the quantity of money. B) A decrease in expected future income. C) An increase in factor prices. D) An increase in the quanfity of capital. E) An increase in expected future profits. 36) We observe a decrease in the price level and an increase in real GDP. Which of the following is a 36) possible explanation? A) A decrease in the quantity of money. B) A decrease in expected future income. C) An increase in factor prices. D) An increase in the quantity of capital. E) An increase in expected future profits. 37) Consider an economy starting from a position of full employment. Which one of the following 37) occurs as a result of an advance in technology? A) The price level falls. B) Real GDP decreases in the short run. C) An inflationary gap arises. D) Factor prices rise in the long run, shifting the short-run aggregate supply curve leftward. E) The long—run aggregate supply curve shifts leftward to create the new long—run equilibrium. Use the table below to answer the following questions. Table 27.1.2 Disposable Income Consumption Expenditure (dollars) (dollars) 325 325 400 375 475 425 550 475 625 525 38) Refer to Table 27.1.2. What is the value of the marginal propensity to save? 38) A) 0.27 B) 0.25 C) 0.67 D) 0.33 E) 1.33 Use the figure below to answer the following questions. Consumption expendilure (2002 éoilms] 800 200 WWWWWMWM 0 80C} Qisposablo income 4,2092 dollars] Figure 27.1.2 39) Refer to Figure 27.1.2. Autonomous consumption is 39) A) -200. B) $200. C) $800. D) $600. E) zero. 40) Which of the following events would shift the consumption function upward? 40) A) an increase in disposable income B) a decrease in disposable income C) a decrease in wealth D) a decrease in expected future disposable income E) an increase in wealth 41) Everything else remaining the same, if Canadians expect future disposable income to rise, then 41) A) Canada's consumption function shifts downward. B) Canada's consumption function shifts upward. C) a movement occurs up along Canada's consumption function. D) a movement occurs down along Canada's consumption function. E) Canada's saving function shifts upward. 42) If an economy's real GDP increases from $100 billion to $150 billion, and at the same time its 42) imports increase from $40 billion to $50 billion, then the marginal propensity to import A) decreases from 0.4 to 0.2. B) is greater than 0.2 and less than 0.4. C) is 0.2. D) is 0.36. E) is 0.4. Use the figure below to answer the following questions. Aggregate pimmad expendiéum (billions 05 2002 dollars] WWW ”AWN W will... ills...” Reci GDP ibiiléms of 2002 dollo'sl Figure 27.2.1 There are no exports or imports in this economy. 43) Refer to Figure 27.2.1. When real GDP is equal to Ya, then aggregate planned expenditure 43) A) exceeds real GDP and real GDP increases. B) is less than real GDP and real GDP decreases. C) exceeds real GDP and real GDP decreases. D) is equal to real GDP and real GDP neither increases nor decreases. E) is less than real GDP and real GDP increases. 10 Use the figure below to answer the following questions. Aggregate planned expenditure {billéans ol‘ 2%? violin”? 4% 200 0 100 200 300 400 Rec! GDP {biilions of 2002 dollars] Figure 27.2.2 The economy depicted does not engage in international trade and has no government. Flamed aggregate expenditure (AB) is equal to the sum of consumption expenditure (C) and investment (I). 44) Refer to Figure 27.2.2. Investment is 44) A) $50 billion. B) $25 billion. C) $75 billion. D) $100 billion. E) increasing as real GDP increases. 45) If AB = 50 + 0.6Y and Y = 200, then unplanned inventories 45) A) increase by 75. B) increase by 30. C) decrease by 75. D) decrease by 30. E) do not change and equilibrium exists. 46) Which of the following quotations illustrates the idea of the multiplier? 46) A) "The new stadium will generate $200 million in spinoff spending." B) "Higher expected profits are leading to higher investment spending by business, and will lead to higher consumer spending." C) "The projected cuts in government jobs will hurt the local retail industry." D) "Taking the grain elevator out of our small town will destroy 300 jobs." E) all of the above 11 47) A rise in the price level A) decreases aggregate expenditure and produces a movement along the aggregate demand curve. B) decreases aggregate expenditure and produces a rightward shift of the aggregate demand curve. C) decreases aggregate expenditure and produces a leftward shift of the aggregate demand curve. D) has no effect on aggregate expenditure. E) increases aggregate expenditure, but has no effect on the aggregate demand curve. 48) In the long run, the multiplier A) has a larger effect on real GDP than it has in the short run, because the multiplier effect has a longer time period to exert its impact on the economy. B) has a larger effect on real GDP than it has in the short run, because there are more induced expenditures in the long run. C) has a larger effect on real GDP than it has in the short run because of changes in the price level. D) has a smaller effect on real GDP than it has in the short run because of changes in the price level. E) can have a smaller or larger effect on real GDP than it has in the short run. 49) Which one of the following can create a demand-pull inflation? A) A sharp increase in the price of oil. B) Higher wages negotiated by unions. C) A cut in the interest rate. D) A decrease in investment as a result of a decrease in expected future profits. E) A decrease in government expenditure on goods and services. 50) Cost-push inflation can result from an initial A) decrease in personal income taxes. B) increase in personal income taxes. C) increase in government expenditure. D) increase in the money wage rate. E) increase in transfer payments. 12 47) 48) 49) 50) Use the figure below to answer the following question. Précs level ((3%)? deflosm, 2002 = 200% 3A5“ :40: {HM i Mi M. WWJWWW WW“ Wilma."MWMWW 0 380 500 620 §eol GD? [billions of 2002 dollars] Figure 28.1.1 51) Refer to Figure 28.1.1. The figure illustrates an economy initially in equilibrium at the intersection 51) of the SASO curve and the ADO ...
View Full Document

{[ snackBarMessage ]}