What is a flexible exchange rate and how does it work?
> South Africa’s real GDP was 1,900 billion rand in 2011 and 1,970 billion rand in 2012. South Africa’s population was 50.5 million in 2011 and 51.0 million in 2012. Calculate: a. The growth rate of real GDP. b. The growth rate of real GDP per person. c. T
> Mexico’s real GDP was 13,405 trillion pesos in 2013 and 13,805 trillion pesos in 2014. Mexico’s population was 118.4 million in 2013 and 119.5 million in 2014. Calculate: a. The growth rate of real GDP. b. The growth rate of real GDP per person. c. The a
> In 2014, China’s real GDP is growing at 7 percent a year and its population is growing at 0.5 percent a year. If these growth rates continue, in what year will China’s real GDP per person be twice what it is in 2014?
> An economy has a fixed price level, no imports, and no income taxes. MPC is 0.80, and real GDP is $150 billion. Businesses increase investment by $5 billion. Calculate the multiplier and the change in real GDP.
> Explain how an increase in business investment at a constant price level changes equilibrium expenditure.
> Suppose that the economy is at full employment, the price level is 100, and the multiplier is 2. Investment increases by $100 billion. Are the values of the multipliers in the short run and the long run larger or smaller than 2?
> Suppose that the economy is at full employment, the price level is 100, and the multiplier is 2. Investment increases by $100 billion. In the short run, does the price level remain at 100? Explain why or why not.
> In an economy, autonomous consumption expenditure is $50 billion, investment is $200 billion, and government expenditure is $250 billion. The marginal propensity to consume is 0.7 and net taxes are $250 billion. Exports are $500 billion and imports are $
> In an economy, autonomous consumption expenditure is $50 billion, investment is $200 billion, and government expenditure is $250 billion. The marginal propensity to consume is 0.7 and net taxes are $250 billion. Exports are $500 billion and imports are $
> In an economy, autonomous consumption expenditure is $50 billion, investment is $200 billion, and government expenditure is $250 billion. The marginal propensity to consume is 0.7 and net taxes are $250 billion. Exports are $500 billion and imports are $
> In an economy, autonomous consumption expenditure is $50 billion, investment is $200 billion, and government expenditure is $250 billion. The marginal propensity to consume is 0.7 and net taxes are $250 billion. Exports are $500 billion and imports are $
> How does an increase in autonomous expenditure change real GDP in the short run? Does real GDP change by the same amount as the change in aggregate demand? Explain why or why not.
> Statistics Canada reported the following CPI data: June 2008……... 217.3 June 2009……… 214.6 June 2010………. 216.9 Why might these CPI numbers be biased? How can alternative price indexes avoid this bias?
> How does a change in the price level influence the AE curve and the AD curve?
> How do the marginal propensity to consume, the marginal propensity to import, and the income tax rate influence the multiplier?
> If real GDP and aggregate expenditure are greater than equilibrium expenditure, what happens to firms’ inventories? How do firms change their production? And what happens to real GDP?
> If real GDP and aggregate expenditure are less than equilibrium expenditure, what happens to firms’ inventories? How do firms change their production? And what happens to real GDP?
> What is the relationship between aggregate planned expenditure and real GDP at equilibrium expenditure?
> Which components of aggregate expenditure are influenced by real GDP?
> Statistics Canada reported that in the second quarter of 2014 Canadian exports increased by $24 billion. Explain and draw a graph to illustrate the effect of an increase in exports on equilibrium real GDP in the short run.
> Statistics Canada reported that in the second quarter of 2014 Canadian exports increased by $24 billion. Explain and draw a graph to illustrate the effect of an increase in exports on equilibrium expenditure in the short run.
> The U.S. Commerce Department reported that wholesale inventories fell 1.3 percent in August for a record 12th consecutive month, evidence that companies are trimming orders to factories, which helped depress economic output during the recession. Economis
> Gains in stock markets and increased house prices boosted Canadians’ wealth in the first quarter of 2014. On a per capita basis, household wealth rose to $222,600. Statistics Canada also reported that consumption expenditure increased by $4 billion in th
> Statistics Canada reported the following CPI data: June 2008……... 217.3 June 2009……… 214.6 June 2010………. 216.9 Calculate the inflation rates for the years ended June 2009 and June 2010. How did the inflation rate change in 2010?
> Gains in stock markets and increased house prices boosted Canadians’ wealth in the first quarter of 2014. On a per capita basis, household wealth rose to $222,600. Statistics Canada also reported that consumption expenditure increased by $4 billion in th
> Initially, the short-run aggregate supply curve is SAS0 and the aggregate demand curve is AD0. Some events change aggregate demand from AD0 to AD1 and aggregate supply from SAS0 to SAS1. What is the new macroeconomic equilibrium? LAS SA 115- SAS a 1
> The increase in real GDP in the second quarter primarily reflected increases in personal consumption expenditure (0.9%), exports (4.2%), and investment (0.8%)—the largest quarterly gain since 2011, mainly due to the increase in consumption expenditure. E
> The Bank of Canada cuts the quantity of money and all other things remain the same. Explain the effect of the cut in the quantity of money on aggregate demand in the short run.
> What are the defining features of classical macroeconomics and what policies do classical macroeconomists recommend?
> Does inflation result from increases in aggregate demand, short-run aggregate supply, or long run aggregate supply?
> Does economic growth result from increases in aggregate demand, short-run aggregate supply, or long-run aggregate supply?
> If the money wage rate rises and potential GDP remains the same, does the LAS curve or the SAS curve shift or is there a movement along the LAS curve or the SAS curve?
> If potential GDP increases, what happens to aggregate supply? Does the LAS curve shift or is there a movement along the LAS curve? Does the SAS curve shift or is there a movement along the SAS curve?
> If the price level rises and the money wage rate remains constant, what happens to the quantity of real GDP supplied? Along which aggregate supply curve does the economy move?
> Too young to retire, too old to get a new job. That’s how many older workers feel after getting laid off and spending time on the unemployment line. Many lack the skills to craft resumes and search online, experts say. Older workers took an average of 21
> Describe the trends and fluctuations in the Canadian employment-to-population ratio and labour force participation rate since 1960.
> If the price level and the money wage rate rise by the same percentage, what happens to the quantity of real GDP supplied? Along which aggregate supply curve does the economy move?
> Suppose that the E.U. economy goes into an expansion. Explain the effect of the expansion on Canadian real GDP and unemployment in the short run.
> In Japan, potential GDP is 600 trillion yen. The table shows Japan’s aggregate demand and short-run aggregate supply schedules. Does Japan have an inflationary gap or a recessionary gap and what is its magnitude? Red GOP wuppied in
> In Japan, potential GDP is 600 trillion yen. The table shows Japan’s aggregate demand and short-run aggregate supply schedules. a. Draw a graph of the aggregate demand curve and the short-run aggregate supply curve. b. What is the shor
> The following events have occurred at times in the history of Canada: ■ The world economy goes into an expansion. ■ Canadian businesses expect future profits to rise. ■ The government increases its expenditure on goods and services in a time of increased
> The following events have occurred at times in the history of Canada: ■ The world economy goes into an expansion. ■ Canadian businesses expect future profits to rise. ■ The government increases its expenditure on goods and services in a time of increased
> When real GDP increased in the second quarter of 2014, consumption expenditure, exports, and fixed investment increased, but business inventory investment fell from $14.5 billion to $7.0 billion. Explain how a fall in business inventories influences aggr
> If a euro deposit in a bank in France earns interest of 4 percent a year and a yen deposit in Japan earns 0.5 percent a year, other things remaining the same and adjusted for risk, what is the exchange rate expectation of the Japanese yen?
> The U.S. dollar exchange rate increased from $0.96 Canadian in June 2011 to $1.03 Canadian in June 2012, and it decreased from 81 Japanese yen in June 2011 to 78 yen in June 2012. What was the value of 100 yen in terms of U.S. dollars in June 2011 and Ju
> The U.S. dollar exchange rate increased from $0.96 Canadian in June 2011 to $1.03 Canadian in June 2012, and it decreased from 81 Japanese yen in June 2011 to 78 yen in June 2012. What was the value of the Canadian dollar in terms of U.S. dollars in June
> Answer the following questions. a. Describe the key differences in performance of the U.S. and Canadian job markets during 2008–2014. b. How do the part-time employment rates of the two countries compare? c. Why might the U.S. job market have been so muc
> The U.S. dollar exchange rate increased from $0.96 Canadian in June 2011 to $1.03 Canadian in June 2012, and it decreased from 81 Japanese yen in June 2011 to 78 yen in June 2012. Did the U.S. dollar appreciate or depreciate against the Canadian dollar?
> Is Canada a net borrower or a net lender? Is it a debtor or a creditor nation?
> What makes an exchange rate hard to predict?
> What makes the Canadian dollar exchange rate fluctuate?
> How is the equilibrium exchange rate determined?
> What are the influences on the supply of Canadian dollars in the foreign exchange market?
> What are the influences on the demand for Canadian dollars in the foreign exchange market?
> The table gives some data about the U.K. economy: Item…………………………… Billions of U.K. pounds Consumption expenditure………………………..………. 721 Exports of goods and services…………………..……… 277 Government expenditures……………………….………. 230 Net taxes………………………………………………….……..
> The table gives some data about the U.K. economy: Item…………………………… Billions of U.K. pounds Consumption expenditure………………………..………. 721 Exports of goods and services…………………..……… 277 Government expenditures……………………….………. 230 Net taxes………………………………………………….……..
> Real consumption expenditure in 2002 chained dollars was $814.2 billion in 2009 and $841.5 billion in 2010. In current dollars, it was $898.2 billion in 2009 and $940.6 billion in 2011. a. Calculate the chained price index for consumption (CPIC) for 2009
> Suppose that the exchange rate rose from 80 yen per Canadian dollar to 90 yen per Canadian dollar. What is the effect of this change on the quantity of Canadian dollars that people plan to sell in the foreign exchange market?
> Suppose that the exchange rate fell from 80 yen per Canadian dollar to 70 yen per Canadian dollar. What is the effect of this change on the quantity of Canadian dollars that people plan to buy in the foreign exchange market?
> Suppose that yesterday the Canadian dollar was trading on the foreign exchange market at 0.75 euros per Canadian dollar and today the Canadian dollar is trading at 0.80 euros per Canadian dollar. Which of the two currencies (the Canadian dollar or the eu
> The People’s Bank of China announces it will cut the required reserve ratio. Explain how lowering the required reserve ratio will impact banks’ money creation process.
> Money in Canada today includes which of the following items? Cash in CIBC’s cash machines; Bank of Canada dollar bills in your wallet; your Visa card; your loan to pay for school fees.
> Does the quantity theory correctly predict the effects of money growth on inflation?
> What is the equation of exchange?
> How is the velocity of circulation calculated?
> What is the quantity theory of money?
> How is money market equilibrium determined in the short run?
> Amazon.com agreed to pay its workers $20 an hour in 1999 and $22 an hour in 2001. The price level for these years was 166 in 1999 and 180 in 2001. Calculate the real wage rate in each year. Did these workers really get a pay raise between 1999 and 2001?
> A bank manager tells you that she doesn’t create money. She just lends the money that people deposit. Explain why she’s wrong.
> What limits the quantity of money that the banking system can create?
> What are the Bank of Canada’s two main policy tools?
> What is the monetary base and how does it relate to the Bank of Canada’s balance sheet?
> What are the functions of depository institutions?
> What are depository institutions?
> What are the main components of money in Canada today?
> Explain the distinction between a central bank and a chartered bank.
> The RBC says lines of credit for education are popular and the size of loans to students has been going up as tuition costs have increased. Compared to “good debt” like a mortgage, student loan rates are higher because the debt is riskier. Financial inst
> The table sets out the data for an economy when the government’s budget is balanced. If the government’s budget becomes a deficit of $1 trillion and the Ricardo-Barro effect occurs, what are the real interest rate and
> A typical family on Sandy Island consumes only juice and cloth. Last year, which was the base year, the family spent $40 on juice and $25 on cloth. In the base year, juice was $4 a bottle and cloth was $5 a length. This year, juice is $4 a bottle and clo
> First Call, Inc., a smartphone company, plans to build an assembly plant that costs $10 million if the real interest rate is 6 percent a year or a larger plant that costs $12 million if the real interest rate is 5 percent a year or a smaller plant that c
> Michael is an Internet service provider. On December 31, 2014, he bought an existing business with servers and a building worth $400,000. During 2015, his business grew and he bought new servers for $500,000. The market value of some of his older servers
> The table sets out the data for an economy when the government’s budget is balanced. Suppose that the quantity of loanable funds demanded increases by $1 trillion at each real interest rate and the quantity of loanable funds supplied i
> Michael is an Internet service provider. On December 31, 2014, he bought an existing business with servers and a building worth $400,000. During 2015, his business grew and he bought new servers for $500,000. The market value of some of his older servers
> What is the crowding-out effect and how does it work?
> How does a government budget surplus or deficit influence the loanable funds market?
> Why is the real interest rate the opportunity cost of loanable funds?
> What is the loanable funds market?
> What are the three main types of markets for financial capital?
> What is the distinction between gross investment and net investment?
> Oregon’s 5.6 percent unemployment rate is close to the national average of 5.5 percent. A few years ago, Oregon had one of the highest unemployment rates in the nation. To avoid rising unemployment, Oregon Governor Kulongoski’s plan is to provide public
> The deficit in the first 10 months of the year from April 2013 to January 2014 totalled $10.54 billion, down from $13.87 billion in the same period a year earlier. a. Explain the effect of the decrease in the budget deficit on the loanable funds market.
> At the start of 2008, India had an annual growth of 9 percent, huge consumer demand, and increasing investment. But by July 2008, India had large government deficits and rising interest rates. Economic growth is expected to fall to 7 percent by the end o
> At the start of 2008, India had an annual growth of 9 percent, huge consumer demand, and increasing investment. But by July 2008, India had large government deficits and rising interest rates. Economic growth is expected to fall to 7 percent by the end o
> In 2012, the Lee family had disposable income of $80,000, wealth of $140,000, and an expected future income of $80,000 a year. At a real interest rate of 4 percent a year, the Lee family saves $15,000 a year; at a real interest rate of 6 percent a year,
> Karrie is a golf pro, and after she paid taxes, her income from golf and interest from financial assets was $1,500,000 in 2013. At the beginning of 2013, she owned $900,000 worth of financial assets. At the end of 2013, Karrie’s financial assets were wor
> Annie runs a fitness centre. On December 31, 2014, she bought an existing business with exercise equipment and a building worth $300,000. During 2015, business improved and she bought some new equipment for $50,000. At the end of 2015, her equipment and
> An economy’s capital stock was $46.3 billion at the end of 2010, $46.6 billion at the end of 2011, and $47.0 billion at the end of 2012. Depreciation in 2011 was $2.4 billion, and gross investment during 2012 was $2.8 billion (all in 2007 dollars). Calcu
> An economy’s capital stock was $46.3 billion at the end of 2010, $46.6 billion at the end of 2011, and $47.0 billion at the end of 2012. Depreciation in 2011 was $2.4 billion, and gross investment during 2012 was $2.8 billion (all in 2007 dollars). Calcu
> On January 1, 2014, Terry’s Towing Service owned 4 tow trucks valued at $300,000. During 2014, Terry’s bought 2 new trucks for a total of $180,000. At the end of 2014, the market value of all of the firm’s trucks was $400,000. What was Terry’s gross inve
> The tables describe an economy’s labour market and its production function in 2014. In 2015, the population increases and labour hours supplied increase by 10 at each real wage rate. Does the standard of living in this economy increase
