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1
What is the real rate of interest if the nominal rate of interest is 10 percent and the rate of inflation is 4 percent?
A)6 percent
B)14 percent
C)10 percent
D)40 percent
2
Which of the following is a variation of cost–push inflation?
A)Import–push inflation
B)Demand–deficient inflation
C)Galloping inflation
D)National inflation
3
What can be said about Canada’s inflation rate since 2001?
A)It has never been below 3 percent.
B)It has always been above 2.5 percent.
C)It has always been below 3 percent.
D)It was occasionally negative.
4
What type of unemployment is associated with recessions?
A)Structural
B)Cyclical
C)Frictional
D)Real
5
Which of the following does inflation affect?
A)Both the level and the distribution of income
B)The distribution but not the level of income
C)The level but not the distribution of income
D)Neither the level nor the distribution of income
6
Suppose that there are 1.2 million unemployed workers, 0.6 million discouraged workers, and 12 million employed workers. What is the unemployment rate?
A)9.1 percent
B)10 percent
C)13 percent
D)15 percent
7
According to the official Statistics Canada definition, what is the minimum amount of time a person must have worked in the previous week in order to be counted as employed?
A)5 hours
B)36 hours
C)40 hours
D)60 minutes
8
Which of the following statements is correct if we apply the “rule of 70” to a known rate of inflation?
A)We would be able to calculate the corresponding rate of unemployment.
B)We could determine when the value of a real asset will approach zero.
C)We could calculate the number of years it will take for the price level to double.
D)We could calculate the size of the GDP gap.
9
Which of the following statements is correct regarding the GDP deflator?
A)It used to measure economic growth.
B)It is calculated by dividing real GDP by nominal GDP and multiplying by 100.
C)It is calculated by dividing real GDP by nominal GDP and dividing by 100.
D)It is a price index that can be used to calculate the inflation rate.
10
How is real income calculated?
A)By dividing the price level by nominal income
B)By dividing nominal income by a price index and multiplying the result by 100
C)By multiplying nominal income by the rate of inflation
D)By adding the rate of inflation to the rate of increase in nominal income
11
What is the cause of cyclical unemployment?
A)A downward fluctuation in the business cycle
B)The declining importance of goods production and the growing importance of service production in our economy
C)The normal dynamics of a free-market economy
D)Technological change
E)The changing nature of demand from one product to another





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