Question 1

If the CPI is 120 in 2002 and 180 in 2012, then between 2002 and 2012, prices have increased by ________.

Accepted Answer

A)  180 percent
B)  80 percent
C)  60 percent
D)  50 percent

Question 2

The fluctuation of interest rates ________.

Accepted Answer

A)  never occurs because the central bank is involved in setting the rate
B)  is due to changes in stock prices
C)  cannot occur because there is only one interest rate
D)  impacts all Canadians

Question 3

A budget ________ occurs when government expenditures exceed tax revenues for a particular time period.

Accepted Answer

A)  deficit
B)  surplus
C)  surge
D)  surfeit

Question 4

Everything else held constant, a weaker Canadian dollar will likely hurt ________.

Accepted Answer

A)  textile exporters in Quebec
B)  wheat farmers in Saskatchewan that sell domestically
C)  automobile manufacturers in Ontario that use domestically produced inputs
D)  furniture importers in British Columbia

Question 5

Stock prices, as measured by the S&P/TSX Composite Index, ________.

Accepted Answer

A)  have not changed much over time
B)  have risen smoothly over time
C)  have been extremely volatile over time
D)  have declined substantially since they peaked in the mid 1980s

Question 6

The delivery of financial services electronically is called ________.

Accepted Answer

A)  e-business
B)  e-commerce
C)  e-finance
D)  e-possible

Question 7

If real GDP grows to $9.5 trillion in 2014 from $9 trillion in 2013, the growth rate for real GDP is ________.

Accepted Answer

A)  6 percent
B)  10 percent
C)  5 percent
D)  0) 5 percent

Question 8

Everything else held constant, a stronger Canadian dollar benefits ________ and hurts ________.

Accepted Answer

A)  Canadian businesses; Canadian consumers
B)  Canadian businesses; foreign businesses
C)  Canadian consumers; Canadian businesses
D)  foreign businesses; Canadian consumers

Question 9

To calculate the growth rate of a variable, you will ________.

Accepted Answer

A)  calculate the percentage change from one time period to the next
B)  calculate the difference between the two variables
C)  add the ending value to the beginning value
D)  divide the increase by the number of time periods

Question 10

Sustained downward movements in the business cycle are referred to as ________.

Accepted Answer

A)  inflation
B)  recessions
C)  economic recoveries
D)  expansions

Question 11

If nominal GDP in 2013 is $10 trillion, and 2013 real GDP in 2002 prices is $9 trillion, the GDP deflator price index is ________.

Accepted Answer

A)  1
B)  1) 1
C)  11
D)  100

Question 12

There is a ________ association between inflation and the growth rate of money ________.

Accepted Answer

A)  positive; demand
B)  positive; supply
C)  negative; demand
D)  negative; supply

Question 13

What is measured by the Gross Domestic Product (GDP)? what is included and what is excluded in the calculation of GDP?

Accepted Answer

GDP is the most commonly used measure of...

Question 14

Which of the following is most likely to result from a stronger Canadian dollar?

Accepted Answer

A)  Canadian goods exported aboard will cost less in foreign countries, and so foreigners will buy more of them.
B)  Canadian goods exported aboard will cost more in foreign countries and so foreigners will buy more of them.
C)  Canadian goods exported abroad will cost more in foreign countries, and so foreigners will buy fewer of them.
D)  Canadians will purchase fewer foreign goods.

Question 15

What happens to economic growth and unemployment during a business cycle recession? What is the relationship between the money growth rate and a business cycle recession?

Accepted Answer

During a recession, output dec...

Question 16

________ theory relates changes in the quantity of money to changes in aggregate economic activity and the price level.

Accepted Answer

A)  Monetary
B)  Fiscal
C)  Financial
D)  Systemic

Question 17

Prior to all recessions, there has been a drop in ________.

Accepted Answer

A)  inflation
B)  the money stock
C)  the rate of money growth
D)  interest rates

Question 18

When prices are measured in terms of fixed (base-year) prices they are called ________ prices.

Accepted Answer

A)  nominal
B)  real
C)  inflated
D)  aggregate

Question 19

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

Accepted Answer

A)  discourage; encourage
B)  discourage; discourage
C)  encourage; encourage
D)  encourage; discourage

Question 20

The cost of borrowing is commonly referred to as the ________.

Accepted Answer

A)  inflation rate
B)  exchange rate
C)  interest rate
D)  aggregate price level

Exam 1: Why Study Money, Banking, and Financial Markets

If the CPI is 120 in 2002 and 180 in 2012, then between 2002 and 2012, prices have increased by ________.

Correct AnswerverifiedShow Answer

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

Correct AnswerverifiedShow Answer

What happens to economic growth and unemployment during a business cycle recession? What is the relationship between the money growth rate and a business cycle recession?

Correct AnswerverifiedDuring a recession, output dec...View AnswerShow Answer

Which of the following is most likely to result from a stronger Canadian dollar?

Correct AnswerverifiedShow Answer

The fluctuation of interest rates ________.

Correct AnswerverifiedShow Answer

The delivery of financial services electronically is called ________.

Correct AnswerverifiedShow Answer

Everything else held constant, a stronger Canadian dollar benefits ________ and hurts ________.

Correct AnswerverifiedShow Answer

What is measured by the Gross Domestic Product (GDP)? what is included and what is excluded in the calculation of GDP?

Correct AnswerverifiedGDP is the most commonly used measure of...View AnswerShow Answer

When prices are measured in terms of fixed (base-year) prices they are called ________ prices.

Correct AnswerverifiedShow Answer

If nominal GDP in 2013 is $10 trillion, and 2013 real GDP in 2002 prices is $9 trillion, the GDP deflator price index is ________.

Correct AnswerverifiedShow Answer

________ theory relates changes in the quantity of money to changes in aggregate economic activity and the price level.

Correct AnswerverifiedShow Answer

A budget ________ occurs when government expenditures exceed tax revenues for a particular time period.

Correct AnswerverifiedShow Answer

To calculate the growth rate of a variable, you will ________.

Correct AnswerverifiedShow Answer

Stock prices, as measured by the S&P/TSX Composite Index, ________.

Correct AnswerverifiedShow Answer

Everything else held constant, a weaker Canadian dollar will likely hurt ________.

Correct AnswerverifiedShow Answer

If real GDP grows to $9.5 trillion in 2014 from $9 trillion in 2013, the growth rate for real GDP is ________.

Correct AnswerverifiedShow Answer

The cost of borrowing is commonly referred to as the ________.

Correct AnswerverifiedShow Answer

There is a ________ association between inflation and the growth rate of money ________.

Correct AnswerverifiedShow Answer

Sustained downward movements in the business cycle are referred to as ________.

Correct AnswerverifiedShow Answer

Prior to all recessions, there has been a drop in ________.

Correct AnswerverifiedShow Answer

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High interest rates might purchasing a house or car but at the same time high interest rates might saving.

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During a recession, output dec...
View Answer

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Everything else held constant, a stronger Canadian dollar benefits and hurts .

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GDP is the most commonly used measure of...
View Answer

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There is a association between inflation and the growth rate of money .

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