• McGill University

• ECON 209

These 101 questions have been randomly selected (for the chapters eligible for examination) by the computer from the test bank that accompanies your text.ȱȱYour prof. has not seen these questions, so as not to bwe influenced by them when setting the final exam.ȱȱThe answer list is at the end of the exam. MULTIPLE CHOICE.ȱȱChoose the one alternative that best completes the statement or answers the question. 1) If constant-dollar national income decreased by $6 billion, then it must be true that A) the price level decreased. B) aggregate output decreased. C) aggregate output increased and the price level decreased. D) aggregate output decreased and the price level increased. E) the level of individual output decreased. 2) Macroeconomics is mainly concerned with the study of A) governments and their intervention in individual markets. B) individual households and how they deal with problems like inflation and unemployment. C) fluctuations and trends in disaggregated data. D) fluctuations and trends in aggregated data. E) large economic units such as General Motors or Molson Breweries 3) Consider a small economy with 3 individuals. Individual A produces 100 chickens that sell for $8 each. Individual B produces 50 bags of corn that sell for $10 each. Individual C produces 40 bushels of apples that sell for $20 each. National product in this economy is A) $2100. B) $2470 C) 190 units of goods produced. D) 100 chickens plus 50 bags of corn plus 40 bushels of apples. E) not determinable from the information provided. 4) If a countryȇs labour force is 15 million people, and 1 million of those are unemployed, the countryȇs unemployment rate is A) 2.5 percent. B) 3.3 percent. C) 4.5 percent. D) 6.7 percent. E) 9.0 percent. 5) During the 1970s, Canada experienced an unusual pattern of interest rates. During this period A) the nominal interest rate was less than the real interest rate. B) the inflation rate was negative, implying a nominal interest rate higher than the real interest rate. C) the inflation rate was negative, implying a real interest rate that was higher than the nominal interest rate. D) the nominal and real interest rates were equal to each other. E) the inflation rate exceeded the nominal interest rate, implying a negative real interest rate. 6) An example of a topicȱȱoutside the scope of macroeconomics is A) the level of productivity, as compared with that in the United States. B) changes in the price of a particular good in a specific market. C) changes in the unemployment rate. D) the aggregate growth rate of the economy. E) the overall level of unemployment. 21 Downloaded by De Brizzy ([email protected]) lOMoARcPSD|5026158 7) To compare the economyȇs aggregate output in two different time periods, economists compare the A) unemployment rates for the two periods. B) real national income for the two periods. C) potential national incomes for the two periods. D) inflation rates for the two periods. E) nominal national income for the two periods. The table below shows total output for an economy over 3 years. Year Money GDP* Deflator Real GDP** 2003 $______ 105 $760,000 2004 $820,000 106 $______ 2005 $855,000 ___ $800,000 ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ * millions of dollars ** real GDP measured in millions of 2002 dollars ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ TABLE 20-5 8) Refer to Table 20-5. The implicit GDP deflator for 2005 is approximately A) 106. B) 107. C) 108. D) 109. E) 110. 9) Refer to Table 20-5. The real GDP in 2004, expressed in 2002 prices, was A) $773 585. B) $798 000. C) $800 000. D) $869 000. E) $900 000. FIGURE 20-1 10) Refer to Figure 20-1. Nominal GDP increased by approximately ________ percent between 1985 and 1990. A) 20 B) 45 C) 65 D) 85 E) 100 22 Downloaded by De Brizzy (etoubrisnel