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ECON-1103 Study Guide - Real Interest Rate, Nominal Interest Rate, Ceteris Paribus


Department
ECONOMICS
Course Code
ECON-1103
Professor
Mary- Ann Spencer

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Practice Questions Econ-1103-007 – Chapter 5-17
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____ 1. The information below was reported by the World Bank. On the basis of this information, which list below
contains the correct ordering of GDP per person from highest to lowest?
Country Nominal GDP 2000 Population 2000
Kenya $10,400 million 30.1 million
Tanzania $9,000 million 33.7 million
Zimbabwe $7,200 million 12.6 million
a. Kenya, Tanzania, Zimbabwe
b. Kenya, Zimbabwe, Tanzania
c. Zimbabwe, Kenya Tanzania
d. Zimbabwe, Tanzania, Kenya
____ 2. Senator Noitall says that in order to help poor countries develop, Canada should: 1. Prevent Canadian
corporations from investing in poor countries because they take profits that the poor countries should have; 2.
Not import goods from poor countries that use child labour; 3. Work to promote political stability in poor
countries; and 4. Reduce poor countries' reliance on market forces in their economies. How many of these
ideas are likely to help poor countries grow?
a. 1
b. 2
c. 3
d. 4
____ 3. The country of Nemedia does not trade with any other country. Its GDP is $20 billion. Its government collects
$4 billion in taxes and pays out $3 billion to households in the form of transfer payments. Consumption
equals $15 billion and investment equals $2 billion. What is public saving in Nemedia, and what is the value
of the goods and services purchased by the government of Nemedia?
a. -$2 billion and $3 billion
b. $1 billion and $3 billion
c. -$1 billion and $4 billion
d. There is not enough information to answer the question.
____ 4. Latoya, a homemaker who works as a volunteer at the local Red Cross and is currently not looking for a job,
is counted as
a. employed and in the labour force.
b. unemployed and in the labour force.
c. unemployed and not in the labour force.
d. not in the labour force.
e. None of the above are correct.
____ 5. Rick loses his job and immediately begins looking for another. Ceteris paribus, the unemployment rate
a. increases, and the labour-force participation rate decreases.
b. increases, and the labour-force participation rate is unaffected.
c. is unaffected, and the labour-force participation rate increases.
d. decreases, and the labour-force participation rate is unaffected.
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