Question 1

Which of the following best describes the concept of 'aggregate demand' in macroeconomics?

Accepted Answer

The total demand for all goods and services in an economy at a given overall price level and in a given period.

Question 2

Suppose the government increases its spending without raising taxes. According to the aggregate demand and supply model, what is the most likely short-run effect on output and the price level?

Accepted Answer

Output increases and the price level rises.

Question 3

A country has a comparative advantage in producing wheat if:

Accepted Answer

It can produce wheat at a lower opportunity cost than other countries.

Question 4

If the Canadian dollar appreciates relative to the US dollar, what is the most likely effect on Canadian exports to the US?

Accepted Answer

Canadian exports to the US will decrease because Canadian goods become more expensive.

Question 5

Which of the following is NOT a component of the balance of payments?

Accepted Answer

Aggregate supply account

Question 6

A country imposes tariffs on imported steel. According to macroeconomic theory, what is a likely consequence?

Accepted Answer

Domestic steel prices increase and imports decrease.

Question 7

Which of the following best describes 'monetary policy'?

Accepted Answer

Central bank actions that influence the money supply and interest rates.

Question 8

If the unemployment rate is above the natural rate, which of the following policies is most likely to reduce unemployment in the short run?

Accepted Answer

Increasing government spending or cutting taxes.

Question 9

Suppose a country experiences high inflation. Which of the following monetary policy actions is most appropriate to address this issue?

Accepted Answer

Decrease the money supply by selling government securities.

Question 10

Which of the following equations correctly represents the calculation of Gross Domestic Product (GDP) using the expenditure approach?

Accepted Answer

$$GDP = C + I + G + (X - M)$$

Question 11

A country is experiencing a recession. Which of the following fiscal policy actions is most likely to stimulate economic growth?

Accepted Answer

Decrease taxes and increase government spending.

Question 12

Which of the following best describes 'perfect competition'?

Accepted Answer

A market with many buyers and sellers, where no single firm can influence the price.

Question 13

If a country’s GDP per capita increases but income inequality also rises, what can be inferred about the country’s socioeconomic wellbeing?

Accepted Answer

Socioeconomic wellbeing may not have improved for everyone, as gains may be unevenly distributed.

Question 14

Which of the following is a likely effect of an open economy compared to a protectionist economy?

Accepted Answer

Greater access to foreign goods and increased competition.

Question 15

Suppose the central bank lowers the policy interest rate. What is the most likely effect on aggregate demand?

Accepted Answer

Aggregate demand increases because borrowing becomes cheaper.

Question 16

Which of the following best explains the impact of a quota on imported cars?

Accepted Answer

It limits the number of imported cars, potentially raising domestic car prices.

Question 17

If a country’s currency depreciates, what is the most likely effect on its balance of trade, assuming other factors remain constant?

Accepted Answer

Exports increase and imports decrease.

Question 18

Which of the following is an example of a credible source of macroeconomic information?

Accepted Answer

A government statistical agency such as Statistics Canada.

Question 19

During the 2008 global financial crisis, which macroeconomic concept was most directly illustrated by the collapse of major banks and the resulting economic downturn?

Accepted Answer

Business cycle

Question 20

A country with a high level of structural unemployment is most likely experiencing which of the following?

Accepted Answer

A mismatch between workers’ skills and the skills demanded by employers.

Macroeconomics: Core Concepts, Applications, and Global Context

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