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| 1 | |
What is the essential difference between Keynesian and neoclassical views of macroeconomy? |
| | A) | The Keynesian view is that the economy is capable of automatically adjusting to economic changes because of the flexibility of wages, prices, and interest rates, while the neoclassical view is that the economy could get stuck in a recessionary gap because of their inflexibility. |
| | B) | The neoclassical view is that the economy can automatically adjust to economic changes because of the flexibility of wages, prices, and interest rates, while the Keynesian view is that the economy could get stuck in a recessionary gap because of their inflexibility. |
| | C) | While both views agree on the automatic adjustment ability of the economy, the Keynesian view sees wages as flexible, but the neoclassical view does not. |
| | D) | While both views agree on the automatic adjustment ability of the economy, the neoclassical view sees wages as flexible, but the Keynesians do not. |
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| 2 | |
What was the supply-side diagnosis of stagflation? |
| | A) | It was triggered by the high price of imported oil and accentuated by declining productivity rates. |
| | B) | It was triggered by the stock market crash and accentuated by the high price of imported oil. |
| | C) | It was triggered by the stock market crash and accentuated by declining productivity rates. |
| | D) | It was triggered by the stock market crash and accentuated by the high price of imported oil. |
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| 3 | |
Which one of the following does not explain why Canada survived the financial crisis so much better than did the United States. |
| | A) | Canada’s banking regulations limit the amount of leverage and securitization possible. |
| | B) | Canada’s Financial Consumer Agency restricted sub-prime lending. |
| | C) | Canadians never got caught up in the ideology that denies any need for regulation of the banking system. |
| | D) | House prices in Canada did not increase. |
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| 4 | |
What would be the most reliable sign that the new economy is a phenomenon of real historical significance? |
| | A) | Rising real GDP |
| | B) | Falling unemployment |
| | C) | Low inflation |
| | D) | Rising productivity over a sustained period of time |
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| 5 | |
How is a historical look at the macroeconomy of Canada beneficial? |
| | A) | It assures us that the real issues of the day do not change. |
| | B) | It enables us to realize that the views of economists about the issues of the day are very similar over time. |
| | C) | It helps us to identify the relationship between economic events and changes in macroeconomic theory. |
| | D) | It establishes the unchanging nature of macroeconomic theory. |
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