Mid-term-sample - Econ 203: Review Questions for Mid Term...

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Econ 203: Review Questions for Mid Term Exam: 1. Unemployment, inflation and economic growth are all issues of: A) macroeconomics. B) microeconomics. C) econometrics. D) ecology. 2. The CPI is a measure of the: A) real wage. B) price of a specific good or service. C) rate of inflation. D) average level of prices relative to prices in the base year. 3. The CPI in year one was 145. The CPI in year two was 151. The rate of inflation between years one and two was _____ percent. A) 4.0 B) 4.1 C) 4.5 D) 5.1 4. If labour force in Utopia grows by 7 per cent and employment grows by 5 percent unemployment rate will: A) increase by about 2 percent. B) remain unchanged. C) fall by about 2 percent. D) rise by about 12 percent. 5. In the absence of government and foreign trade, the national accounts show that: A) firms supply both the resources and output used in production. B) households demand both resources and outputs. C) firms supply resources and households demand outputs. D) households supply resources and firms supply output. 6. Nominal GDP measures: A) total incomes. B) total output. C) total expenditure. D) all of the above. Page 1
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7. All of the following are components of investment except: A) increases in plant and equipment. B) inventory expansion. C) residential housing construction. D) purchases of stocks and bonds. 8. The largest expenditure component of Canada's GDP is: A) consumption. B) private-sector investment. C) government purchases. D) net exports 9. The difference between GDP at market prices and GDP at basic prices is: A) net indirect taxes. B) direct taxes. C) progressive taxes. D) regressive taxes. 10. If nominal GDP increases at a rate of 10 per cent per year while the GDP deflator increases at 8 per cent per year, then: A) real GDP remains constant. B) real GDP rises by 10 per cent. C) real GDP falls by 8 per cent. D) real GDP rises by 2 per cent. 11. GDP is not satisfactory measure of economic welfare because: A) it excludes non-market activities B) it excludes externalities C) it excludes the black economy D) all the above 12. The aggregate demand curve is: A) vertical if full employment exists. B) horizontal when there is considerable unemployment in the economy. C) downsloping because of the interest-rate, wealth or real balances, and foreign trade effects. D) downsloping because production costs decrease as real output increases. Page 2
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13. The wealth effect indicates that: A) an increase in the price level will increase the demand for money, increase interest rates, and reduce consumption and investment spending. B) a lower price level will decrease the real value of many financial assets and therefore reduce spending. C) a higher price level will increase the real value of many financial assets and therefore increase spending. D)
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This note was uploaded on 06/10/2011 for the course ECON 00000112 taught by Professor Ianirvine during the Spring '09 term at Concordia Canada.

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Mid-term-sample - Econ 203: Review Questions for Mid Term...

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