曼昆宏观经济学英语课后题答案.pdf

CHAPTER 24:MEASURING THE COST OF LIVING True/FalseIndicate whether the statement is true or false.1.The circular flow diagram describes all transactions between households and firms in a simple economy and shows the equality of expenditures and income.ANSWER:T POINTS:0/1 2.Gross domestic product includes most items produced and sold illicitly.ANSWER:F POINTS:0/1 3.Net national product is the total income of a nations residents minus losses from depreciation.ANSWER:T POINTS:0/1 4.Disposable personal income is the income that households and unincorporated business have left after satisfying all their obligations to the government.It equals personal income minus personal taxes and certain non-tax payments to government.ANSWER:T POINTS:0/1 5.The purchase of new houses by households is included in the calculation of personal consumption expenditures of GDP.ANSWER:F POINTS:0/1 Multiple ChoiceIdentify the choice that best completes the statement or answers the question.1.When GDP falls,a.income and expenditure must both fall.b.income and expenditure can both rise.c.income must fall,but expenditure may rise or fall.d.expenditure must fall,but income may rise or fall.ANSWER:A POINTS:0/1 2.Income equals expenditure because a.firms always pay out all their revenue as income to someone.b.each time a sale is made,there is a buyer and a seller.c.households own the factors of production used to generate incomes.d.All of the above are correct.ANSWER:B POINTS:0/1 3.If a province makes the production and sale of illicit drugs legal,then GDP a.must increase.b.must decrease.c.wouldnt change.d.may increase or decrease.ANSWER:A POINTS:0/1 4.When a government provides subsidies to encourage growth of small businesses,the subsidies would a.be included in GDP because they are invested by businesses.b.be included in GDP because they are a form of government spending.c.not be included in GDP because they are transfer payments.d.may or may not be included in GDP,depending on how the funds are used.ANSWER:C POINTS:0/1 5.Diesel fuel is a.always considered a final good.b.counted as an intermediate good if a company uses it to provide transportation services.c.counted as a final good if a farmer uses it to run a tractor to grow crops.d.Both b and c are correct.ANSWER:B CHAPTER 25:PRODUCTION AND GROWTH True/FalseIndicate whether the statement is true or false.1.The GDP deflator reflects the prices of goods and services bought by consumers,and the consumer price index reflects the price of all final goods and services produced domestically.ANSWER:F POINTS:0/1 2.The consumer price index compares the price of a fixed basket of goods and services to the price of the basket in the base year.On the other hand,the GDP deflator compares the price of currently produced goods and services to the price of the same goods and services in the base years.ANSWER:T POINTS:0/1 3.Indexation refers to the automatic correction of a dollar amount for the effects of inflation by law or contract.ANSWER:T POINTS:0/1 4.Long term contracts between firms and unions will sometimes include partial or complete indexation of the wage to the consumer price index.This is called a cost-of-living allowance clause.ANSWER:T POINTS:0/1 5.The core inflation rate is the consumer price index with the exclusion of the most volatile components such as energy and food.ANSWER:T POINTS:0/1 Multiple ChoiceIdentify the choice that best completes the statement or answers the question.1.In the CPI,goods and services are weighted according to a.how much a typical consumer buys of each item.b.whether the items are necessities or luxuries.c.how much of each item is produced in the domestic economy.d.how much is spent on them in the national income accounts.ANSWER:A POINTS:0/1 2.By not taking into account the possibility of consumer substitution,the CPI a.understates the standard of living.b.overstates the cost of living.c.neither overstates nor understates the cost of living.d.doesnt accurately reflect the cost of living,but it is unclear if it overstates or understates the cost of living.ANSWER:B POINTS:0/1 3.If the prices of Brazilian-made shoes imported into Canada increases,then a.both Canadas GDP deflator and its consumer price index will increase.b.neither Canadas GDP deflator nor its consumer price index will increase.c.Canadas GDP deflator will increase but its CPI will not increase.d.Canadas consumer price index will increase,but its GDP deflator wont change.ANSWER:D POINTS:0/1 4.If increases in the prices of Canadian car insurance causes the CPI to increase by 3 percent,the GDP deflator will likely increase by a.more than 3 percent.b.3 percent.c.less than 3 percent.d.All of the above are correct.ANSWER:C POINTS:0/1 5.The real interest rate tells you a.how quickly your savings account will grow.b.how quickly the purchasing power of your savings account will grow.c.the size of your savings account.CHAPTER 26:SAVING,INVESTMENT,AND THE FINANCIAL SYSTEM True/FalseIndicate whether the statement is true or false.1.One way to raise future productivity is to invest less current resources in the production of capital.ANSWER:F POINTS:0/1 2.Diminishing returns occur when the benefits from an extra unit of output declines as the quantity of output declines.ANSWER:F POINTS:0/1 3.Malthusian theory states that an ever-increasing population would continually strain societys ability to provide for itself.This doomed human beings to forever live in poverty.ANSWER:T POINTS:0/1 4.Productivity growth is measured by real output per worker.ANSWER:T POINTS:0/1 5.The primary reason that living standards are higher today than they were a century ago is that technological knowledge has advanced.ANSWER:T POINTS:0/1 Multiple ChoiceIdentify the choice that best completes the statement or answers the question.1.Of the following countries,which grew the slowest over the last 100 years?a.Brazil.b.Mexico.c.Singapore.d.United States.ANSWER:D POINTS:0/1 2.On average,each year of schooling raises a persons wage in Canada by about a.3 percent.b.10 percent.c.15 percent.d.25 percent.ANSWER:B POINTS:0/1 3.The primary reason that Canadian living standards are higher today than they were a century ago is that a.more productive natural resources have been discovered.b.physical capital per worker has increased.c.technological knowledge has increased.d.human capital has increased.ANSWER:C POINTS:0/1 4.Many countries in Africa have low growth rates.This is partly due to a.few natural resources b.high trade barriers.c.low incomes,making it very difficult for them to grow.d.All of the above are correct.ANSWER:B POINTS:0/1 5.A government can encourage growth and,in the long run,raise the economys standard of living by encouraging a.population growth.b.consumption spending.c.saving and investment.d.trade restrictions.ANSWER:C POINTS:0/1 CHAPTER 28:UNEMPLOYMENT AND ITS NATURAL RATE True/FalseIndicate whether the statement is true or false.1.Private savings are the tax revenue that the government has left after paying for its spending;and public savings is the income that households have left after paying for taxes and consumption.ANSWER:F POINTS:0/1 2.A budget deficit is an excess of tax revenue over government spending;and a budget surplus is a shortfall of tax revenue from government spending.ANSWER:F POINTS:0/1 3.A budget surplus decreases the supply of loanable funds,increases the interest rate,and stimulates investment.ANSWER:F POINTS:0/1 4.The financial system is the group of institutions in the economy that help to match one persons savings with another persons investment.ANSWER:T POINTS:0/1 5.A mutual fund is an institution that sells shares to the public and uses the proceeds to buy a selection,or portfolio,of various types of stocks,bonds,or both stocks and bonds.ANSWER:T POINTS:0/1 Multiple ChoiceIdentify the choice that best completes the statement or answers the question.1.Which of the following is correct?a.Lenders buy bonds and borrowers sell them.b.Long-term bonds usually pay a lower interest rate than do short-term bonds because long-term bonds are riskier.c.Junk bonds refer to bonds that have been resold many times.d.None of the above are correct.ANSWER:A POINTS:0/1 2.In a closed economy,national saving equals a.investment.b.income minus the sum of consumption and government expenditures.c.private saving plus public saving.d.All of the above are correct.ANSWER:D POINTS:0/1 3.If the current market interest rate for loanable funds is below the equilibrium level,then there is a a.shortage of loanable funds and the interest rate will rise.b.surplus of loanable funds and the interest rate will rise.c.shortage of loanable funds and the interest rate will fall.d.surplus of loanable funds and the interest rate will fall.ANSWER:A POINTS:0/1 4.Suppose that Parliament were to introduce a new investment tax credit.What would happen in the market for loanable funds?a.The demand for loanable funds would shift left and interest rates fall.b.The demand for loanable funds would shift right and interest rates rise.c.The supply of loanable funds would shift left and interest rates rise.d.The supply of loanable funds would shift right and interest rates fall.ANSWER:B POINTS:0/1 5.If Canada increases its budget deficit,it will reduce a.private saving and so shift the supply of loanable funds left.b.investment and so shift the demand for loanable funds left.c.public saving and so shift the supply of loanable funds left.CHAPTER 33:AGGREGATE DEMAND AND AGGREGATE SUPPLY True/FalseIndicate whether the statement is true or false.1.The labour force is the number of employed plus the number of unemployed.ANSWER:T POINTS:0/1 2.Discouraged searchers are individuals who continually search for work even though they cannot find employment.ANSWER:F POINTS:0/1 3.The natural rate of unemployment is the rate of unemployment that is natural to any economy and can never change.ANSWER:F POINTS:0/1 4.Employment insurance is a government program intended to ease the burden of those who are permanently unemployed.ANSWER:F POINTS:0/1 5.Collective bargaining is a process by which unions and firms agree on the terms of employment.ANSWER:T POINTS:0/1 Multiple ChoiceIdentify the choice that best completes the statement or answers the question.1.Janine is on a temporary layoff from the factory where she makes BBQs.If Janine participates in the Statistics Canada survey,she will be classified as a.unemployed and in the labour force.b.unemployed and out of the labour force.c.employed and in the labour force.d.employed and out of the labour force.ANSWER:A POINTS:0/1 2.Unemployment insurance a.raises unemployment and reduces search effort b.lowers unemployment and reduces search efforts c.increases search effort and raises unemployment d.increases search effort and decreases unemployment ANSWER:A POINTS:0/1 3.Minimum-wage laws a.are the major cause of natural unemployment.b.probably reduce teenage employment.c.mainly affect skilled workers.d.All of the above are correct.ANSWER:B POINTS:0/1 4.When a union bargains successfully with an employer,in that industry a.unemployment and wages both rise.b.unemployment and wages both fall.c.unemployment rises and wages fall.d.unemployment falls and wages rise.ANSWER:A POINTS:0/1 5.Economists argue that efficiency wages a.reduce labour-force participation rates.b.reduce the natural rate of unemployment.c.reduce the incentive to shirk.d.increase worker turnover.ANSWER:C POINTS:0/1 CHAPTER 29:THE MONETARY SYSTEM True/FalseIndicate whether the statement is true or false.1.A recession is a period of two or more consecutive quarters of negative real gross domestic product growth and rising unemployment.ANSWER:T POINTS:0/1 2.Gross domestic product is the same as the sum of consumption,investment,government purchases and net exports.ANSWER:T POINTS:0/1 3.Aggregate supply is a curve that shows the quantity of goods and services that households,firms,and the government want to buy at each price level ANSWER:F POINTS:0/1 4.The short run aggregate supply curve slopes upwards showing a negative relation between the quantities supplied and the various price levels ANSWER:F POINTS:0/1 5.Most debates among economists about the causes of the great depression of the 1930s are centered on a large decline in aggregate supply.ANSWER:F POINTS:0/1 Multiple ChoiceIdentify the choice that best completes the statement or answers the question.1.In recent years,the decrease in real GDP during a recession is a.mostly a decrease in investment spending.b.mostly a decrease in consumption spending.c.mostly a decrease in net exports.d.None of the above.ANSWER:A POINTS:0/1 2.Economists generally agree that classical economic theory applies a.in neither the short nor long run.b.in the short run and in the long run.c.in the short run,but not in the long run.d.in the long run,but not in the short run.ANSWER:D POINTS:0/1 3.To increase aggregate demand,a government could a.raises personal income taxes.b.decrease the money supply.c.begin a new tax credit for business investment.d.All of the above are correct.ANSWER:C POINTS:0/1 4.A recession caused by a reduction in aggregate demand corrects itself over time as the expected price level a.rises,shifting aggregate demand right.b.rises,shifting aggregate demand left.c.falls,shifting aggregate supply right.d.falls,shifting aggregate supply left.ANSWER:C POINTS:0/1 5.Changes in the price of oil a.can only lead to recessions.b.have had little effect on the business cycle in Canada.c.change the economy principally by changing aggregate demand.d.created both inflation and recession in Canada in the 1970s.ANSWER:D CHAPTER 30:MONEY GROWTH AND INFLATION True/FalseIndicate whether the statement is true or false.1.Liquidity refers to the ease with which an asset flows through the bank.ANSWER:F POINTS:0/1 2.Money is the set of assets in an economy that people regularly use to buy goods and services from other people.ANSWER:T POINTS:0/1 3.Demand deposits are balances in the bank that depositors can access on demand by writing a cheque.ANSWER:T POINTS:0/1 4.The money multiplier is the amount of reserves that the banking system generates with each dollar of money.ANSWER:F POINTS:0/1 5.The bank rate is the rate of interest that the Bank of Canada gives to commercial banks on their deposits with the Bank of Canada.ANSWER:F POINTS:0/1 Multiple ChoiceIdentify the choice that best completes the statement or answers the question.1.Credit cards are a.used as a method of payment.b.part of the M2 money supply.c.a method of deferring payment.d.a unit of account.ANSWER:C POINTS:0/1 2.Actions of the Bank of Canada are likely to influence the rate of a.unemployment in the long-run,but not the short-run.b.inflation in the short-run,but not the long-run.c.inflation in the long run,but not the short-run.d.inflation,but doesnt affect the rate of unemployment.ANSWER:C POINTS:0/1 3.Suppose a bank has a 5 percent reserve ratio,$10,000 in deposits,and it loans ou