Learn Trading And Investing - Stocks, Forex And Cryptocurrency

Economics Questions

FOR BEGINNERS

Multiple Choice— Select the option that best completes the sentence or provides the answer to the question.

Jevan compares the unit price of chocolate bars in order to get the "best buy". This represents using money as
1. a store of value.
2. a unit of account.
3. a unit of deferred payment.
4. all of the above


The real demand for money is
1. the nominal demand for money divided by the price level.
2. equal to the nominal demand for money as long as inflation is fully anticipated.
3. equal to the supply of money at all times.
4. the nominal demand for money multiplied by the price level.


Monetary validation
1. causes a supply shock.
2. can perpetuate inflation.
3. increases unemployment.
4. acts to reduce inflation.


Under a system of flexible exchange rates, a nation which uses a tight money policy during a period of worldwide inflation would be likely to experience
1. a loss in international reserves.
2. an appreciation of its currency.
3. a fall in the value of its currency.
4. a surplus in its current account.


If the economy is currently in monetary equilibrium, an increase in the money supply will
1. lead to a movement down the money demand curve to a lower rate of interest.
2. cause a reduction in the demand for money, leading to a higher rate of interest.
3. cause an increase in the demand for money, leading to a lower rate of interest.
4. not change the equilibrium conditions.


Stable growth in the money supply rule will contribute to
1. increased ability for the Bank of Canada to "fine tune" the economy.
2. destabilization if the demand for money fluctuates.
3. stability of the price level.
4. inflation.


With respect to the balance of payments,
1. if the current account is in surplus, the capital account must also be in surplus.
2. the current account balance must be zero.
3. if the current account is in deficit, the capital account must also be in deficit.
4. total payments must equal total receipts.


Suppose that in Canada we experience a rise in the Canadian dollar price of foreign exchange. In this circumstance, the dollar will have ________ and the exchange rate will have ________.
1. appreciated; risen
2. depreciated; fallen
3. appreciated; fallen
4. depreciated; risen


The difference between the government's debt and deficit is that the debt is the
1. amount owed by the Bank of Canada to the commercial banks where as the deficit is the amount owed by the Government of Canada to the Bank of Canada.
2. accumulation of past deficits minus surpluses whereas the deficit is the annual shortfall between revenues and disbursements.
3. amount the government pays interest payments whereas the deficit has not yet incurred interest charges.
4. annual shortfall of revenues minus disbursements where as the deficit is the accumulation of past debts .


In the case of frictional unemployment,
1. there is a mismatch between the needs of employers with job vacancies and the unemployed workers.
2. the only possible cure comes from shifting the aggregate demand curve to the left.
3. the unemployed workers and the employers with available job vacancies have not yet found each other.
4. there are no jobs for the unemployed people in the economy.