Question 1

Which of the following individuals would be classified as part of the labour force according to Statistics Canada?

Accepted Answer

Arif, who is looking for a job.

Question 2

When the economy is at full employment, which type of unemployment is zero?

Accepted Answer

Cyclical unemployment

Question 3

Which of the following best describes structural unemployment?

Accepted Answer

Unemployment caused by a mismatch between workers' skills and the skills new jobs require

Question 4

According to the paradox of thrift, if everyone in an economy increases their savings, what is the likely short-run macroeconomic outcome?

Accepted Answer

Businesses lay off workers

Question 5

Which of the following is included in the calculation of Canada's gross domestic product (GDP)?

Accepted Answer

The value of a Ford Pickup truck produced and sold in Canada

Question 6

If real GDP per person increases, which of the following is true?

Accepted Answer

The standard of living of the average person increases

Question 7

Which of the following is NOT a phase of the business cycle?

Accepted Answer

Retraction

Question 8

Suppose real GDP in an economy falls for two consecutive quarters. What is this period called?

Accepted Answer

Recession

Question 9

Which of the following would NOT shift the macro production possibilities frontier (PPF)?

Accepted Answer

Increased prices of inputs

Question 10

Which of the following is a positive external shock to the Canadian economy?

Accepted Answer

The advent of new technologies

Question 11

Which formula correctly represents aggregate spending in the Canadian economy?

Accepted Answer

$$C + I + G + X - IM$$

Question 12

If nominal GDP in 2025 is calculated, which data should be used?

Accepted Answer

Prices and quantities of the current year

Question 13

Which of the following is NOT a reason that GDP incorrectly measures the quality of life?

Accepted Answer

Net taxes

Question 14

Which of the following is an example of non-market production?

Accepted Answer

Parents home-schooling their children

Question 15

Which of the following is NOT a source of economic growth?

Accepted Answer

Increasing stock market prices

Question 16

Which of the following best describes the Hands-Off (Markets Self-Adjust) view in macroeconomics?

Accepted Answer

Supply creates its own demand

Question 17

Which of the following is NOT part of the fundamental macroeconomic question?

Accepted Answer

A strong Canadian dollar

Question 18

If the Bank of Canada lowers interest rates, this is an example of:

Accepted Answer

A positive external shock

Question 19

Which of the following is the best measure of maximum living standards?

Accepted Answer

Potential GDP per person

Question 20

Suppose real GDP is above potential GDP. What is this situation called?

Accepted Answer

An inflationary gap

Chapter 5 - 8.5 Midterm Review Questions

Study Guide - Practice Questions