Macroeconomics, 6Ce (Abel/Bernanke/Croushore/Kneebone)
Chapter 1 Introduction to Macroeconomics
1.1 Multiple-Choice Questions
1) Which of the following is a topic of macroeconomics?
A) why nations have different rates of growth
B) what causes inflation and what can be done about it
C) why unemployment periodically reaches very high levels
D) all of the above
Answer: D
Diff: 1 Type: MC Page Ref: 2
2) The two major reasons for the tremendous growth in output in the Canadian economy
over the last 125 years are
A) population growth and budget deficit.
B) population growth and increased productivity.
C) low unemployment and budget surplus.
D) low budget deficit and low trade deficits.
Answer: B
Diff: 1 Type: MC Page Ref: 2
3) The main reason Canada has such a high standard of living is
A) low unemployment.
B) high average labour productivity.
,C) low inflation.
D) low government budget deficits.
Answer: B
Diff: 1 Type: MC Page Ref: 2
4) Average labour productivity is
A) the amount of workers per machine.
B) the amount of machines per worker.
C) the ratio of employed to unemployed workers.
D) the amount of output per worker.
Answer: D
Diff: 1 Type: MC Page Ref: 2
5) Which of the following statements applies to the average labour productivity in
Canada?
A) Average labour productivity has risen over time.
B) Average labour productivity growth has been strong during the World War II, 1950s
and 1960s.
C) Average labour productivity growth has slowed down since 1970s, but increased in
1990s.
D) All of the above.
Answer: D
Diff: 1 Type: MC Page Ref: 4
6) In analyzing macroeconomic data during the past year, you have discovered that
average labour productivity fell, but total output increased. What was most likely to have
caused this?
A) Government deficit was reduced.
,B) The capital/output ratio probably rose.
C) There was an increase in labour input.
D) Unemployment probably increased.
Answer: C
Diff: 3 Type: MC Page Ref: 4
7) The business cycle describes the
A) progression of an industry's structure from monopoly to perfect competition.
B) progression of an industry's structure from perfect competition to monopoly.
C) expansion and contraction of an individual industry within the economy.
D) expansion and contraction of economic activity in the economy as a whole.
Answer: D
Diff: 1 Type: MC Page Ref: 4
8) The short-run, but sometimes sharp, contractions and expansions in economic activity
are called
A) recession.
B) stagnation.
C) inflation.
D) business cycles.
Answer: D
Diff: 1 Type: MC Page Ref: 5
9) When national output declines, the economy is said to be in
A) an expansion.
B) a deflation.
, C) a recovery.
D) a recession.
Answer: D
Diff: 1 Type: MC Page Ref: 5
10) During recessions, the unemployment rate ________ and output ________.
A) rises; falls
B) rises; rises
C) falls; rises
D) falls; falls
Answer: A
Diff: 1 Type: MC Page Ref: 5
Chapter 1 Introduction to Macroeconomics
1.1 Multiple-Choice Questions
1) Which of the following is a topic of macroeconomics?
A) why nations have different rates of growth
B) what causes inflation and what can be done about it
C) why unemployment periodically reaches very high levels
D) all of the above
Answer: D
Diff: 1 Type: MC Page Ref: 2
2) The two major reasons for the tremendous growth in output in the Canadian economy
over the last 125 years are
A) population growth and budget deficit.
B) population growth and increased productivity.
C) low unemployment and budget surplus.
D) low budget deficit and low trade deficits.
Answer: B
Diff: 1 Type: MC Page Ref: 2
3) The main reason Canada has such a high standard of living is
A) low unemployment.
B) high average labour productivity.
,C) low inflation.
D) low government budget deficits.
Answer: B
Diff: 1 Type: MC Page Ref: 2
4) Average labour productivity is
A) the amount of workers per machine.
B) the amount of machines per worker.
C) the ratio of employed to unemployed workers.
D) the amount of output per worker.
Answer: D
Diff: 1 Type: MC Page Ref: 2
5) Which of the following statements applies to the average labour productivity in
Canada?
A) Average labour productivity has risen over time.
B) Average labour productivity growth has been strong during the World War II, 1950s
and 1960s.
C) Average labour productivity growth has slowed down since 1970s, but increased in
1990s.
D) All of the above.
Answer: D
Diff: 1 Type: MC Page Ref: 4
6) In analyzing macroeconomic data during the past year, you have discovered that
average labour productivity fell, but total output increased. What was most likely to have
caused this?
A) Government deficit was reduced.
,B) The capital/output ratio probably rose.
C) There was an increase in labour input.
D) Unemployment probably increased.
Answer: C
Diff: 3 Type: MC Page Ref: 4
7) The business cycle describes the
A) progression of an industry's structure from monopoly to perfect competition.
B) progression of an industry's structure from perfect competition to monopoly.
C) expansion and contraction of an individual industry within the economy.
D) expansion and contraction of economic activity in the economy as a whole.
Answer: D
Diff: 1 Type: MC Page Ref: 4
8) The short-run, but sometimes sharp, contractions and expansions in economic activity
are called
A) recession.
B) stagnation.
C) inflation.
D) business cycles.
Answer: D
Diff: 1 Type: MC Page Ref: 5
9) When national output declines, the economy is said to be in
A) an expansion.
B) a deflation.
, C) a recovery.
D) a recession.
Answer: D
Diff: 1 Type: MC Page Ref: 5
10) During recessions, the unemployment rate ________ and output ________.
A) rises; falls
B) rises; rises
C) falls; rises
D) falls; falls
Answer: A
Diff: 1 Type: MC Page Ref: 5
