$$\frac{1,440,000}{18,000,000} \times 100 = 8\%$$

$$\frac{\text{Nominal GDP}}{\text{Price Level}}$$

$$\frac{120 - 115}{115} \times 100 = 4.35\%$$

Question 1

Which of the following is an example of a stock variable in macroeconomics?

Accepted Answer

Amount of money in a savings account at a specific date

Question 2

Suppose the Canadian labour force is 18,000,000 and the number of unemployed is 1,440,000. What is the unemployment rate?

Accepted Answer

$$\frac{1,440,000}{18,000,000} 	imes 100 = 8\%$$

Question 3

Which type of unemployment is most likely to increase during a recession?

Accepted Answer

Cyclical unemployment

Question 4

A discouraged worker is best described as:

Accepted Answer

Someone who has stopped looking for work because they believe no jobs are available

Question 5

If the number of employed people increases while the working-age population remains constant, what happens to the labour force participation rate?

Accepted Answer

It increases

Question 6

Which of the following is NOT counted in GDP?

Accepted Answer

The value of vegetables grown and consumed by a family on their own farm

Question 7

Real GDP is calculated as:

Accepted Answer

$$\frac{	ext{Nominal GDP}}{	ext{Price Level}}$$

Question 8

Which of the following is a flaw in using GDP as a measure of well-being?

Accepted Answer

GDP ignores non-market activities such as household work

Question 9

If the CPI in 2020 is 120 and the CPI in 2019 is 115, what is the inflation rate for 2020?

Accepted Answer

$$\frac{120 - 115}{115} 	imes 100 = 4.35\%$$

Question 10

Which of the following is a cost of inflation?

Accepted Answer

Random redistribution of wealth between borrowers and lenders

Question 11

A government budget deficit occurs when:

Accepted Answer

Government spending exceeds taxes collected

Question 12

Which of the following is a monetary policy tool?

Accepted Answer

Changing the money supply and interest rates

Question 13

If a country has a trade surplus, which of the following must be true?

Accepted Answer

Exports are greater than imports

Question 14

Which of the following best describes the business cycle?

Accepted Answer

A periodic but irregular up and down movement in economic activity

Question 15

Which of the following would increase the measured unemployment rate?

Accepted Answer

Discouraged workers re-enter the labour force and start looking for jobs

Question 16

Which policy tool is used by the federal and provincial governments to influence the economy?

Accepted Answer

Fiscal policy

Question 17

If real GDP per person in 1971 was $$17,053 and in 2016 was 42$$,158, by what percentage did real GDP per person increase?

Accepted Answer

$$\frac{42,158 - 17,053}{17,053} 	imes 100 = 147.3\%$$

Question 18

Which of the following is most likely to be classified as structural unemployment?

Accepted Answer

A worker's skills are no longer needed due to technological change

Question 19

Which of the following would NOT be considered a cost of unemployment?

Accepted Answer

Improved work habits

Question 20

If the government continually runs deficits, what is the likely long-term consequence?

Accepted Answer

Government debt will increase due to the accumulation of interest payments

Introduction to Basic Macroeconomic Variables

Study Guide - Practice Questions