Question

If expectations about the future course of the economy don't change at all, then a large increase in wealth will generally:

Question 34 options:

	decrease savings at a given interest rate and shift the supply curve for loanable funds to the right.
	increase savings at a given interest rate and shift the supply curve for loanable funds to the left.
	increase savings at a given interest rate and shift the supply curve for loanable funds to the right.
	decrease savings at a given interest rate and shift the supply curve for loanable funds to the left.

If purchasing power parity holds between Canada and the USA:

Question 37 options:

	it makes no difference whether one shops in Canada using Canadian $ or in the USA using US $.
	the nominal exchange rate must be 1.
	trade must be balanced between the two countries.
	Canada must no longer have a trade deficit.

If money has intrinsic value, it has:

Question 40 options:

	value that is conferred by fiat.
	None of these is true.
	value unrelated to its use as money.
	value only as its use as money.

In Canada over the last 50 years:

Question 42 options:

	the percentage of GDP that represents imports and exports has remained fairly steady.
	the economy had become much more open to foreign trade.
	both imports and exports have fallen dramatically.
	imports have grown, and exports have fallen.

During times of economic recovery, the labour force participation rate typically:

Question 44 options:

	falls, as more incomes per household are needed to make ends meet.
	rises, as more people need work.
	rises, as discouraged workers start looking hard for work.
	falls, as more people quit their jobs when times are good.

When the economy is producing at a quantity that is less than its long-run aggregate supply:

Question 48 options:

	it is pushing some of its resources to operate beyond capacity.
	the short-run aggregate supply curve will shift to the left
	in the absence of government intervention, the short-run aggregate supply curve will shift to the right.
	the aggregate demand curve will shift to the right.

Answer 1

Q. 34. If expectation about the future course of economy do not change then if there increase a large amount of wealth then: ans- option (iii) there will be increase in savings at given interest rate and rightward shift of supply of loanable fund will occur.

Due to increase in wealth people will save more given the interest rate did not change and this more savings will increase the loanable fund. The supply of loanable fund will shift rightward.

Q)37. If purchasing power parity holds between Canada and USA then: - ans - option(i). It makes no difference whether one shops in USA using US$ or in Canada using Canadian $. As purchasing power of parity is same there will be no difference in cost of any item when we purchase that from that country using that currency. It will be same cost using US $ in USA and Canadian $ in Canada.

Q)40. When money has intrinsic value then it has - ans. option (iii) value unrelated to its use as money. When money has this intrinsic value it's value can not be related with its face value. It has value more than on it or it has greater implications. When a old coin which is rare then it's value does not represent it's intrinsic value. Intrinsic value is the worth intense on it.

Q) 42. In Canada in last 50 years - ans.option (i). The percentage of exports and imports that represent the GDP is steady in last 50 years. Canada's export and import is more or less steady in last 50 years.

Q)44. During economic recovery the labour force participation - ans. option(ii) rises ,as more people need work. During recovery more people need work because jobs starts to open and people look for work.