Write a four paragraph answer, citing the text, to Would you be willing to pay $500 today in exchange for $10,000 in 30 years? What would be the key considerations in answering yes or no? Would your answer depend on who is making the promise to
Refer to table 10.13 to answer this question. What is the cost of producing one sword in
A. 4 broomsticks.
B. 0.25 broomsticks.
C. 0.67 broomsticks.
D. 1.5 broomsticks.
Blooms: Analysis, Application
Learning Objective: 10
Explain how a decrease in the price level affects the aggregate quantity demanded.
A. It causes an increase in the interest rate and a decrease in investment spending.
B. It causes an increase in the interest rate and an increase in investment spendin
Topic: 11-01 Exchange Rates
Which of the following groups has a demand for Canadian dollars?
A. American tourists visiting Mexico.
B. Canadians who receive dividends from American corporations.
C. Canadian supermarkets that buy Washington
By what method may a government be able to increase the value of its country's currency?
A. By buying its own currency.
B. By buying foreign currencies.
C. By selling its own currencies.
D. By decreasing its rate of interest.
E. By imposin
88. What does it mean for a country that is on a fixed exchange-rate system to have a balance of
A. The quantity supplied of its currency on the international money market will exceed the
B. The exchange rate is overva
What does protectionism mean?
A. Policies designed to limit the amount of exports leaving a country.
B. A form of insurance on exported goods in case of loss during transportation.
C. Subsidies give in order to keep the prices of imported goods low.
37. Suppose that government wishes to affect the level of aggregate demand in the economy. All of
the following, except one, are consistent policy measures. Which is the exception?
A. A tax increase and an increase in money supply
B. A tax reduction and a
Learning Objective: 09-01 Describe the determinants of money demand and supply; and explain how equilibrium in the money market is achieved.
Sayre - Chapter 09 #3
Topic: 09-04 The Demand For Money
Which is true of the demand for money?
The following table shows the balance sheet for all banks combined in the banking system. All
banks have a target reserve ratio of 12.5 percent.
a) What is the amount of excess reserves.
b) What is the maximum amount that loans and deposits can be in
Distinguish between M1 and M2.
Notice deposits and personal term deposits are included in M2 but not in M1. (Both include
currency and demand deposits.)
Blooms: Comprehension, Knowledge
Learning Objective: 08-02 Explain what is and i
Select the answer that correctly completes this sentence: "The Phillips curve shows the
A. the rate of change in the price level and the unemployment rate."
B. the rate of change in the price level and the level of real output pr
70. What is a quota?
A. A limit imposed on the production or sale of a product.
B. A restriction placed on the importation of foreign products.
C. A tax levied on imports.
D. A maximum or minimum price placed on a product by government regulation.
Topic: 11-10 The Balance of Payments
What is the value of the euro in terms of dollars if a French importer can buy 8 dollars for 10
Accessibility: Keyboard Navigation
Blooms: Analysis, Application
Below is some hypothetical data for the countries of Canada and Mexico. (Assume that Canada
has 10 million workers per month available and Mexico has 20 million.)
Canada's Production Possibilities
(Output in millions of bushels per month)
18. Which of the following would neutralize the crowding-out effect?
A. An increase in tax rates
B. An increase in the money supply
C. An increase in money demand
D. A decrease in the money supply
19. According to supply-siders, what is one of the keys to
17. According to neoclassical economists, what would happen if total spending was less than total
A. Product prices would rise, but wage rates would fall.
B. Product prices would fall, but wage rates would rise.
C. Nominal GDP would rise, but real
124.If a Canadian hockey stick has a price of $32, how much does it cost in :
a) Europe, assuming an exchange rate of 1 euro = $1.60 Can.
b) China, assuming an exchange rate of 1 Yuan = $0.20 Can.
125.Refer to the following list, and identify who would be
Assume that people hold money when the interest rate is low so they can purchase bonds at a
lower price if the interest rate increases. According to Keynes, what is this called?
A. Asset demand for money.
B. Transactions demand for money.
57. The most common way for government to fund expansionary fiscal policy is by borrowing from
the general public.
58. Monetary policy cannot be used effectively when a country has a fixed exchange rate.
59. Expansionary fiscal polic
Sayre - Chapter 13 #62
Topic: 13-08 The Keynesian Response to Neoclassicists
Keynes did not agree with neoclassical theory about prices and wages being flexible, nor did
he believe that their adjustment would guarantee full employment. Wh
137.a) Which of the two money demand curves in Figure A below depicts the Keynesian and which
depicts the monetarist view?
b) Which of the two investment demand curves in Figure B below depicts the Keynesian and
which depicts the monetarist view?
55. Explain Keynes's approach to how equality of savings and investment in the economy is brought
56. According to Keynes, how does an economy recover from a recession?
57. What policy approaches were used during post World War II to stabilize the
33. Refer to the information above to answer this question. What is the opportunity cost of one unit of
soya milk in Mental?
A. 0.5 units of rice cakes.
B. 0.75 units of rice cakes.
C. 2 units of rice cakes.
D. 5 units of rice cakes.
E. 10 units of rice c
40. Explain how a surplus in the labour market is eliminated.
41. The following data shows the labour demand and supply for the economy of Aimeng:
a) What is the equilibrium wage rate, and how many workers would be employed?
b) Suppose the wage rate is 30
Learning Objective: 11-04 Compare flexible and fixed exchange rate systems.
Sayre - Chapter 11 #93
Topic: 11-08 Fixed Exchange Rates and an Increase in Demand
Which of the following is true if the Canadian dollar bec
72. The response of the US and Canada to budget deficits that had arisen from stimulative policies
were different from those of European countries. Explain the differences.
73. An inevitable result of recession is a budget deficit. Explain the reason a de
52. All of the following, except one, are benefits of free trade. Which is the exception?
A. Products will be produced at lower cost and in higher volumes.
B. There will be an increase in the variety of products available.
C. There will be increased compe
66. All of the following items, except one, are part of the equation of exchange. Which is the
A. Real output.
B. The interest rate.
C. The money supply.
D. The velocity of money.
E. The price level.
67. To be able to determine the value of the
Refer to the graph above to answer this question. Which statement is true of the shift from AS2
A. It could be caused by a tax cut.
B. It illustrates stagflation.
C. It would cause real GDP to rise.
D. It illustrates economic growth.
E. It cou