econ-midterm2

  1. Which of the following countries, had the highest growth rate over the last 100 years?a.Brazil
    b.Germany
    c.Canada
    d.United States
    e.Argentina
    a
  2. Which of the following is considered human capital?



    D.
  3. Natural resources



    D.
  4. In a market economy, we know that a resource has become scarcer when



    A.
  5. Which of the following would increase productivity?



    D.
  6. One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch: It requires that society



    B.
  7. If there are diminishing returns to capital,



    D.
  8. If a country's saving rate increases, in the long run



    D.
  9. If a country's saving rate increases, in the long run



    C.
  10. Foreign saving is used for domestic investment when foreigners engage in



    C.
  11. The source of most technological progress is



    D.
  12. All else equal, which of the following would tend to cause GDP per person to rise?



    B.
  13. Stock representsa.
    a claim to the profits of a firm.
    b. ownership in a firm.
    c. equity finance.
    d. All of the above are correct
    d
  14. The amount of revenue a firm receives for the sale of its products minus its costs of production as measured by its accountants is the firm's



    C.
  15. Which of the following equations will always represent GDP in an open economy?



    C.
  16. The country of Meditor uses the merit as its currency. Recent national income statistics showed that it had GDP of 700 million merits, no government transfer payments, taxes of 210 million merits, a budget surplus of 60 million merits, and investment of 100 million merits. What were its consumption and government expenditures on goods and services?




    A.
  17. In the small closed economy of San Lucretia, the currency is the denar. Statistics for last year show that private saving was 60 billion denars, taxes were 70 billion denars, government purchases of goods and services were 80 billion denars, there were no transfer payments by the government, and GDP was 400 billion denars. What were consumption and investment in San Lucretia?




    B.
  18. 18. Which of the following is not always correct in a closed economy?



    D.
  19. ____ 19. In 1995, MP Bill Gatt proposed that the income tax be replaced with a consumption tax. If his program had been passed, then today it is likely that the equilibrium interest rate



    A.
  20. 20. What would happen in the market for loanable funds if the government were to increase the tax on interest income?




    B.
  21. 21. If Parliament reduced the tax rate on interest income, investment



    D.
  22. Other things the same, if the government increases transfer payments to households, then



    B.
  23. Which of the following is incorrect?



    D.
  24. Unemployment data is collected



    B.
  25. Which of the following definitions is correct?



    C.
  26. The labor force participation rate is computed as the number of adults in the labour force




    A.
  27. Consider two people who are currently out of work. Deb is not currently looking for work but would like a job. Although she is not currently searching for work, she has done so at some time in the recent past. Ted is not looking for work, because he doesn't think there are jobs that he would qualify for available. Statistics Canada considers



    B.
  28. Image Upload 1

    Refer to Figure 28-2. If the minimum wage fell from $7 to $5





    B.
  29. Which of the following is incorrect?



    A.
  30. Which of the following is an example of a violation of right-to-work laws?



    A.
  31. Dan decides to hire some additional workers for his golf-ball factory. The equilibrium wage is $12 per hour. Efficiency wage theory suggests that it is reasonable for Dan to offer



    C.
  32. Anything that makes the efficiency wage rise relative to the market-clearing wage will



    D.
  33. Which of the following best illustrates the medium of exchange function of money?a. You keep some money hidden in your shoe.
    b. You keep track of the value of your assets in terms of currency.
    c. You pay for your double latte using currency.
    d. None of the above is correct.
    c
  34. Term deposits are included in



    B.
  35. Given the size of the Canadian. money stock, it is puzzling that



    A.
  36. Image Upload 2
    Refer to Table 29-3. If the reserve requirement is 10 percent, this bank



    C.
  37. Image Upload 3
    Refer to Table 29-3. If the reserve requirement is 10 percent and then someone deposits $50,000 into the bank, it will



    B.
  38. When the Bank of Canada conducts open market purchases,



    A.
  39. When Bank of Canada decreases the bank rate, banks will borrow more from Bank of Canada, lend



    A.
  40. If the reserve ratio is 20 percent, and banks do not hold excess reserves, when Bank of Canada sells $40 million of bonds to the public, bank reserves



    A.
  41. The banking system has $20 million in reserves and has a reserve requirement of 20 percent. The public holds $20 million in currency. Bankers did not use to hold any excess reserves, but difficult economic times make them decide that it is prudent to hold 25 percent of deposits as reserves. At the same time, the public decides to deposit $6.7 million in currency into the banking system. Other things equal, what must the Bank of Canada do to bank reserves to keep the money supply the same?



    A.
  42. When the money market is represented in a diagram with the value of money on the vertical axis, an increase in the money supply shifts the money supply curve to the



    D.
  43. Real GDP measures



    A.
  44. According to the classical dichotomy, which of the following is not influenced by monetary factors?



    B.
  45. Last year, Tealandia produced 60,000 bags of green tea, which sold at 5 units each of Tealandia's currency-the Leaf. Tealandia's money supply was 10,000. What was the velocity of money in Tealandia?
    a. 40
    b. 30c. 5/6
    d. 1/30
    e. 1/40
    b
  46. The evidence gained from studying hyperinflation indicates that



    C.
  47. Shoeleather costs refer to



    C.
  48. You buy a stock and its price rises less than the price level, so before taxes you made



    C.
  49. Norbert purchased 10 shares of Gentech stock for $200 a share in year 1 and sold all the shares in year 2 for $220 a share. Between year 1 and year 2, the price index increased by 5%. The tax on capital gains is 50%. If the capital gains tax is on nominal gains, how much tax does Norbert pay on his gain?



    A.
  50. Wealth is distributed from creditors to debtors when inflation is



    D.
  51. A forest is an example of a nonrenewable resource.
    F
  52. If the productivity slowdown had not occurred in 1973, the income of the Average Canadian today would be about 70 percent higher.
    T
  53. Generally, if people expect a company to have higher future profits, the price of the stock will be driven down.
    F
  54. If a share of stock in Skylight Chili sells for $75, the retained earnings per share are $5, and the divided per share is $2, then the price-earnings ratio is 15.
    F
  55. Index funds are usually outperformed by mutual funds that are actively managed by professional money managers.
    F
  56. Suppose a small closed economy has GDP of $5 billion, Consumption of $3 billion, and Government expenditures of $1 billion. Then domestic investment and national saving are both $1 billion.
    T
  57. A decrease in taxes on interest income would increase the interest rate.
    F
  58. The unemployment rate is defined as the percentage of the labour force that is unemployed. The labour force participation rate is the percentage of the adult population that is either employed or unemployed.
    T
  59. Firms might offer efficiency wages in order to attract a better pool of applicants.
    T
  60. The quantity theory implies that if output and velocity are constant, then a 50 percent increase in the money supply would lead to less than a 50 percent increase in the price level.
    F
Author
dawn
ID
138266
Card Set
econ-midterm2
Description
econ-midterm2
Updated