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Midterm

Exam-ECON1000-2005AprilExam


Department
Economics
Course Code
ECON 1000
Professor
All
Study Guide
Midterm

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ry
W Carleton
tqZ UNIVERSITY
exnflilfnhor,r
APRIL 2OO5
DURATION:
s HOURS No.
of
Students:
?f3
Department
Name
&
Course Number: ECON
1000
A, B,
C, V
Course
Instructor(s) a. SHKUROpAI M. BURNS,
B.
cLABB
AurHoRrzED
UEMoRANDA
Non-programmable calculators are permitted.
Students MUST
count the
number
of
pages
in this examination
question
paper
before beginning to
write, and report
any discrepancy to a proctor.
This
question
paper
has _
13
_ pages.
This examination
question paper MAy be taken
from
the
examination room.
In
addition
to this question paper,
students require: / examination
booklet,S
yeslnotr
a Scantron
sheet yes6lnop
PLEASE
READ ALL INSTRUCTIONS
CAREFULLY.
Note: This examination has three
(3) sections.
PART A: MULTIPLE CHOICE (30
Questions,
1
marks each).
Answer ALL
multiple choice
questions
on SCANTRON SHEET provided.
(Iotal30 Marks)
PART B: SHORTER QTIESTIONS:
Answer any FIVE (5)
of the eight
questions.
Each question
is worth 8 marks. Answer in one
of the exam booklets
provided, clearly marking the Qover
with ,,PART B".
(Total40 Marks)
PART C: LONGER QUESTIONS: Answer any ONE (1)
of the four questions.
Each question
is
worth 30
marks. Answer in the second
exam
booklet
provided, clearly marking the cover with ((PART
C".
(Total30 Marks)

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

SECNON
A:
MIJLTIPLE
CHOICE
QUESTIONS
1. For
any
given
Year,
the
CPI
is
A. the
price ofthe
basket
of
goods
and
services
inthe
base
year dMded
by
the
price
of
the
basket
in the
given
year, then
divided
by 100'
B. higfrer
thanthe
previous
year'
C. tlre
price
ofthe
basket
of
goods
and
services
inthe base
year divided
by
the
price
ofthe
basket
in
the
given
year, then
muhiplied
by 100'
D. the
price oftlie
baslet
of
goods ard
servbes
inthe
givenyear
divided
by
tlre
price ofthe
basket
in
the
base
year, then
muftiplied
by
100'
2. enLrrportant
difference
betweenthe
GDP
deflator
and
tl* consuner
price
index
is
that
A. the
GDp
deflator
reflects
the
prices
of all
goods
and
services
produced
donrestically,
whereas
the
consurner
price
index
reflects
the
prices of goods
and
serryices
bouglrt
by
consulngrs.
B. tlre
GDp
deflator
reflects
the
prices of goods
and
services
bougfrt
by producers
and
consumers,
whereas
ttre
consuner
price
index
reflects
the
prices of goods and
services
bought
bY
cons'urers'
C. tt,"
GDp
deflator
reflects
the
prices
of
all
goods and
services
produced
by
a
natiort's
resources,
whereas
the
conswner
price
index
reflects
the
prices of
goods
and
services
bought
bY
consumers'
D. the
GDp
deflator
reflects
the
prices
of
goods
and
services
bougfrt
by
prodtrcers,
whereas
the
consr,rrBr
price index
reflects
the
prices
of goods and
services
bought
by
consunrers'
3. Diminishing
returns
is
the
notion
that
A. as
the
stock
of
capital
ages,
the
extra
o$ptrt
produced
decreases'
B. as
the
stock
of capital
is
increased,
the
extra
output
produced
from
an
additional
urit of
caPital
frlls.
c. as
resources
are
rsed
to
prodwe
capital
goods, fewer
additional
capital
goods
can
be
Prodtrced.
D. as
more
and
more
resources
are
rsed
to produce
capital
goods,
fewer
and
fewer
corsurrptiongoodswillbeavailableforfuturegenerations.
Page
I

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

5.
6.
7.
8.
Which
ofthe
following is tue ofthe market for loanable finrds?
A. The swply of loanable fi.urds
cornes
fiomhouseholds and frrns
who
want
to bonow for
invesftrent.
B. The swply of
loanable finrds comes fiomhou.seholds
who want to save
sonp
oftheir
inconp and lend
it ont.
C. ttre
dernand for loanable
fi.urds
conps fiomhouseholds who wantto
save some oftheir
inconp ard lend it oul
D. None ofthe above statenents
are true.
Minimurnwages
A. have an
inportant effect on certain
goqps
with
particularly
ttrgh unenploynrent
rates.
B. affect
allparts ofthe
labour market
equally.
C. are a
predominant
cause ofunenployment
in the econorny.
D. do not cause
unenployment
April
is the owner of
a conputer hot-lirB company.
It is very eryensive
for her
to rmnitor all
of
her
enployees.
She believes
that her enployees are shirking. What would efficiency-wage
theory
suggest that April
do to redrrce shirking?
A. raise
wages above the rnarket equilibrfun
level
B. gu. incentive
pay
to errployees for
tuning
intheir
fellow workers who are shirking
C. spend
nnre lnoney
ard effort onnnnitoring
D. fre all existing
workers and hire new ones
An open-nnrket
purchase
is where
the Bank of Canada
A. purclriases
govemnrent
bonds fromtlre
prrblic,
thereby increasing
the money
supply.
B. increases
the money swply by selling
go'/ernnxent
bonds to the
public,
C. decreases
the money swply
by selling
government
bonds to
the
public.
D. purcllases
govennrent
bords
fromthe
public,
thereby
decreasing the rnoney
sryply.
Ifthe reserve
ratio is 20
percent,
and
banks
do
not hold
excess
reserves,
when
the Bank
of
Canada
purchases
$1
million ofbonds
fromtln
ptrblic,
bank
reserves
will and the
money supply
will eventually
A. increase
by
$l millioq
increase by
$2
million
B. decrease
by
$5
millioru decrease
by
$5
million
C. increase by
$l millioq
increase by
$5
million
D. decrease
by
$1
millioru decrease
by
$5
million
Page2
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