Chapter 6
In 2008-2009, the Canadian economy experienced:
the Great Recession.
A business buys $7,000 worth of resources to produce a product. The business makes 150 units of the product and each of them sells for $90. The value added by the business to these products is:
$6,500
Recently, the changes in the educational attainment of the Canadian labour force indicate that the percentage of those:
attending university have increased.
A worker would be hurt least by inflation when the:
worker is protected by a cost-of-living adjustment clause in an employment contract.
If the MPC is .70 and gross investment increases by $3 billion, the equilibrium GDP will:
increase by about $10 billion.
If the economy's output and income double in 35 years, we can:
conclude that its average annual rate of growth is about 2 percent.
Transfer payments are:
excluded when calculating GDP because they do not reflect current production.
The most important contributor to increases in the productivity of Canadian labour is:
technological advance.
Cost-push inflation could be explained by:
an increase in the per-unit production cost.
The simple multiplier is:
1/MPS.
Which of the following is not an economic investment?
the purchase of 50 shares of Aliant by a retired business executive
In calculating GDP by the expenditure approach, we sum up:
investment, government purchases, consumption, and net exports.
Other things equal, if a full-employment economy reallocates a substantial quantity of its resources to capital goods, we would expect:
labour productivity to rise.
The consumer price index (CPI):
measures changes in the prices of a market basket of some 600 goods and services purchased by urban consumers.
The multiplier effect:
magnifies small changes in spending into larger changes in output and income.
Which would be considered an investment according to economists?
the purchase of a new machinery by McCain Food
A distinguishing characteristic of public transfer payments is that:
the recipients make no contribution to current production in return for them.
Economies of scale indicates:
the fact that large producers may be able to use more efficient technologies than smaller producers.
For every 1 percent that the actual unemployment rate exceeds the natural rate, there is generated a 2 percent GDP gap. This is a statement of:
Okun's law.
If government expenditures increase by $20 billion and equilibrium GDP increases by $50 billion as a result, we can conclude that:
the MPC for this economy is .6.
The inequality of saving and planned investment:
may be of considerable significance because of the subsequent changes in income, employment, and the price level.
Setup Corporation buys $100,000 of sand, rock, and cement to produce ready-mix concrete. It sells 10,000 cubic yards of concrete at $30 a cubic yard. The value added by Setup Corporation is:
$200,000
One of the distinguishing features of the recent productivity growth is:
technological progress from the microchip and information technology.
If the consumer price index was 115 in one year and 120 in the next year, then the rate of inflation from one year to the next was:
4.3 percent.
Unplanned changes in inventories:
bring actual investment and saving into equality at all levels of GDP.