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1
How is real GDP calculated?
A)By dividing nominal GDP by the GDP deflator and multiplying by 100
B)By multiplying nominal GDP by the GDP deflator and dividing by 100
C)By multiplying nominal GDP by the CPI and dividing by 100
D)By dividing the GDP deflator by nominal GDP and multiplying by 100
2
What would be the effect of 100 000 unemployed people becoming discouraged workers?
A)The unemployment rate would remain unchanged, and the size of the labour force would decline.
B)Both the unemployment rate and the size of the labour force would decline.
C)The unemployment rate would decline, and the size of the labour force would remain unchanged.
D)Both the unemployment rate and the size of the labour force would rise.
3
How does Statistics Canada define a recession?
A)A decline in real GDP during one quarter
B)A decline in real GDP over two consecutive quarters
C)An unemployment rate in excess of 8 percent along with a decline in GDP
D)A decline in nominal GDP over one quarter
E)An unemployment rate in excess of 8 percent
4
Why are economists concerned about deflation?
A)Because it is associated with high rates of unemployment
B)Because it could lead to very rapid and uncontrollable rates of growth
C)Because it could drive the nominal interest rate to very high levels
D)Because it could cause credit markets to freeze up, and, in turn, cause economic growth to stop





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