Diff: 1 Type: MC Page Ref: 4
14) An open economy is a national economy that
A) has good relations with its neighbouring countries.
B) has a stock market that is open to traders from anywhere in the world.
C) has extensive trading and financial relationships with other national economies.
D) has established diplomatic relations with most other nations.
Answer: C
Diff: 1 Type: MC Page Ref: 4
15) A closed economy is a national economy that
A) doesn't interact economically with the rest of the world.
B) has a stock market that is not open to traders from outside the country.
C) has extensive trading and financial relationships with other national economies.
D) has not established diplomatic relations with other national economies.
Answer: A
Diff: 1 Type: MC Page Ref: 4
16) Canadian exports are goods and services
A) produced abroad and sold to Canadians.
B) produced in Canada and sold to Canadians.
C) produced abroad and sold to foreigners.
D) produced in Canada and sold to foreigners.
Answer: D
Diff: 1 Type: MC Page Ref: 4
17) Canadian imports are goods and services
A) produced abroad and sold to Canadians.
B) produced in Canada and sold to Canadians.
C) produced abroad and sold to foreigners.
D) produced in Canada and sold to foreigners.
Answer: A
Diff: 1 Type: MC Page Ref: 4
18) A country has a trade surplus when
A) imports exceed exports.
B) imports equal exports.
C) exports exceed imports.
D) imports are zero.
Answer: C
Diff: 1 Type: MC Page Ref: 4
19) A country has a trade deficit when
A) imports exceed exports.
B) imports equal exports.
C) exports exceed imports.
D) exports are zero.
Answer: A
Diff: 1 Type: MC Page Ref: 4
20) In 2001 Anchovy had imports of $50 billion, exports of $60 billion, and Anchovy's GDP was equal to $300 billion. The trade surplus was what percent of GDP in 2001?
A) 3.3%
B) 10.0%
C) 16.7%
D) 20.0%
Answer: A
Diff: 2 Type: MC Page Ref: 4
21) In 2005, DAMA's exports were $30 billion, imports $40 billion, and real GDP $200 billion. DAMA had a trade ________ equal to ________ of GDP in 2005.
A) surplus; 5 percent
B) deficit; 5 percent
C) surplus; 10 percent
D) deficit; 10 percent
Answer: B
Diff: 2 Type: MC Page Ref: 4
22) The exchange rate is
A) the rate of return in the stock market.
B) the price index for goods and services.
C) the price of Canadian dollar in terms of foreign currencies.
D) the rate of return on investment in foreign countries.
Answer: C
Diff: 1 Type: MC Page Ref: 4
23) Fiscal policy determines ________ while monetary policy determines ________.
A) government spending and taxation; the growth of the money supply
B) government's capital; government's investment
C) the rate of growth of the economy; the rate of growth of prices
D) the inflation rate; the rate of growth of prices
Answer: A
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24) In Canada, monetary policy is determined by
A) the Bank of Canada.
B) the prime minister.
C) private citizens.
D) the Department of Finance.
Answer: A
Diff: 1 Type: MC Page Ref: 5
25) The difference between microeconomics and macroeconomics is that
A) microeconomics looks at supply and demand for goods, while macroeconomics looks at supply and demand for services.
B) microeconomics looks at prices, while macroeconomics looks at inflation.
C) microeconomics looks at individual consumers and firms, while macroeconomics looks at national totals.
D) microeconomics looks at national issues, while macroeconomics looks at global issues.
Answer: C
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26) The process of adding together individual economic variables to obtain economywide totals is called