Sample TEST 2

3/26/2022 Sample Test 2 - ALL SECTIONS: Attempt review https://eclass.yorku.ca/mod/quiz/review.php?attempt=3273218&cmid=1139897 1/14 Dashboard / My courses / W22 - AP/ECON 1010 Metacourse / Tests & Exam / Sample Test 2 - ALL SECTIONS Started on Saturday, 26 March 2022, 3:08 PM State Finished Completed on Saturday, 26 March 2022, 3:33 PM Time taken 25 mins 22 secs Grade 16 out of 30 ( 53 %) Question 1 Complete Not graded The name of the instructor for your section of ECON 1010 is: a. Professor McKeown b. Professor Seury c. Professor Malik d. Professor Colby e. Professor Quattrociocchi f. Professor Kabir The correct answers are: Professor Seury, Professor Malik, Professor Colby, Professor Kabir, Professor McKeown, Professor Quattrociocchi

3/26/2022 Sample Test 2 - ALL SECTIONS: Attempt review https://eclass.yorku.ca/mod/quiz/review.php?attempt=3273218&cmid=1139897 2/14 Question 2 Complete Not graded Question 3 Correct Mark 1 out of 1 Academic Honesty Statement As your instructor, I am committed to your success as a York University student which includes promoting and encouraging academic integrity in this course, and on this exam/test. Here is how to be academically honest on this exam/test: You will complete your open-book exam/test by yourself. No other person will complete the exam/test for you. Impersonation, and receiving or giving any form of assistance, paid or not, from or to another person during the exam/test is cheating. You will not replicate, copy, print or record any questions on this exam/test to share with others. We will follow up on all breaches of academic honesty, and these violations will be reported to the relevant university authorities. I have read, understood and agree to follow this Academic Honesty Statement. a. Yes, I agree. (You MUST choose this option for your test/exam to be graded.) b. No, I do not agree. (Selecting this option means that your test/exam WILL NOT be graded.) The correct answer is: Yes, I agree. (You MUST choose this option for your test/exam to be graded.) [MUST SHOW WORK] According to the law of demand for Canadian dollars, as the exchange rate Select one: A. rises, the quantity demanded of Canadian dollars increases. B. rises, the demand curve for Canadian dollars shifts rightward. C. falls, the quantity demanded of Canadian dollars increases. ± D. falls, the demand curve for Canadian dollars shifts rightward. E. rises or falls, none of above are true. The correct answer is: falls, the quantity demanded of Canadian dollars increases.

3/26/2022 Sample Test 2 - ALL SECTIONS: Attempt review https://eclass.yorku.ca/mod/quiz/review.php?attempt=3273218&cmid=1139897 4/14 Question 6 Correct Mark 1 out of 1 Question 7 Correct Mark 1 out of 1 Question 8 Correct Mark 1 out of 1 The Canadian dollar depreciates if Select one: A. R.O.W. demand for Canadian exports increases. B. Canadian real GDP increases. C. Canadian interest rates fall relative to other countries. ± D. the Canadian inflation rate falls relative to other countries. E. world prices for Canadian resources rise. The correct answer is: Canadian interest rates fall relative to other countries. When the Canadian money supply decreases, the Select one: A. supply of Canadian dollars increases. B. demand for Canadian dollars decreases. C. Canadian dollar appreciates in value. ± D. value of the Canadian dollar does not change. E. Canadian interest rates fall. The correct answer is: Canadian dollar appreciates in value. A stronger Canadian dollar hurts Select one: A. exporters. ± B. importers. C. Americans only. D. Canadians who shop in the U.S. E. Canadian students who attend U.S. universities. The correct answer is: exporters.

3/26/2022 Sample Test 2 - ALL SECTIONS: Attempt review https://eclass.yorku.ca/mod/quiz/review.php?attempt=3273218&cmid=1139897 5/14 Question 9 Correct Mark 1 out of 1 Question 10 Correct Mark 1 out of 1 If the interest rate in Japan is greater than the interest rate in Canada, rate of return parity suggests that Select one: A. the inflation rate is lower in Japan than in Canada. B. the yen is expected to depreciate against the Canadian dollar. ± C. Canadian financial assets are poor investments. D. the yen is expected to appreciate against the Canadian dollar. E. Japanese financial assets are poor investments. The correct answer is: the yen is expected to depreciate against the Canadian dollar. [MUST SHOW WORK] Suppose purchasing power parity ( PPP ) depends only on hamburgers. The exchange rate is C$1.00 = US$0.80 and hamburger prices are C$2.00 in Canada and US$1.50 in the U.S. PPP suggests that the Select one: A. demand for Canadian dollars will increase. B. supply of Canadian dollars will decrease. C. supply of U.S. dollars will decrease. D. Canadian dollar is overvalued. ± E. Canadian dollar is undervalued. The correct answer is: Canadian dollar is overvalued.

3/26/2022 Sample Test 2 - ALL SECTIONS: Attempt review https://eclass.yorku.ca/mod/quiz/review.php?attempt=3273218&cmid=1139897 7/14 Question 14 Correct Mark 1 out of 1 Question 15 Incorrect Mark 0 out of 1 Question 16 Correct Mark 1 out of 1 Short-run aggregate supply increases if Select one: A. the price level rises. B. government transfer payments decrease. C. prices for resource inputs fall. ± D. the price level falls. E. prices for resource inputs rise. The correct answer is: prices for resource inputs fall. Government investments to improve the quality of public infrastructure like roads, transit and sewers Select one: A. shifts only LAS rightward. ² B. shifts both LAS and SAS rightward. C. shifts both LAS and SAS leftward. D. increases aggregate quantity supplied. E. decreases aggregate quantity supplied. The correct answer is: shifts both LAS and SAS rightward. Which media headline describes a leftward shift of the LAS curve? Select one: A. "Decreased consumer spending may lead to recession." B. "Recent tornadoes destroyed factories in Edmonton and Calgary." ± C. "Faster growth may be due to more women entering the labour force." D. "Increased consumer spending is expected to lead to inflation, with no change in real GDP." E. "Higher wage settlements may lead to inflation." The correct answer is: "Recent tornadoes destroyed factories in Edmonton and Calgary."

3/26/2022 Sample Test 2 - ALL SECTIONS: Attempt review https://eclass.yorku.ca/mod/quiz/review.php?attempt=3273218&cmid=1139897 8/14 Question 17 Incorrect Mark 0 out of 1 Question 18 Correct Mark 1 out of 1 Question 19 Correct Mark 1 out of 1 A positive supply shock from improving technology shifts Select one: A. both the SAS and LAS curves rightward. B. both the SAS and AD curves rightward. C. the SAS curve rightward but leaves the LAS curve unchanged. ² D. the LAS curve rightward but leaves the SAS curve unchanged. E. both the SAS and LAS curves leftward. The correct answer is: both the SAS and LAS curves rightward. Which is a negative demand shock? Select one: A. lower value of Canadian dollar. B. higher income taxes. ± C. lower interest rates. D. rising price level. E. rising input prices. The correct answer is: higher income taxes. [MUST SHOW WORK] Falling average prices and continued full employment most likely come from Select one: A. OPEC B. a negative supply shock. C. a positive demand shock. D. a positive supply shock. ± E. a negative demand shock. The correct answer is: a positive supply shock.

3/26/2022 Sample Test 2 - ALL SECTIONS: Attempt review https://eclass.yorku.ca/mod/quiz/review.php?attempt=3273218&cmid=1139897 10/14 Question 23 Incorrect Mark 0 out of 1 Question 24 Incorrect Mark 0 out of 1 Question 25 Incorrect Mark 0 out of 1 The "No - Markets Fail Often" camp believes that investors behave like Select one: A. Wayne Gretzky. B. logical, rational Vulcans. C. herds of animals. D. thermostats. E. spirited animals. ² The correct answer is: herds of animals. When average prices rise, the Select one: A. demand for money increases. B. quantity demanded of money increases. ² C. purchasing power of money increases. D. demand for money decreases. E. quantity demanded of money decreases. The correct answer is: demand for money increases. Bonds offer a(an) Select one: A. uncertain stream of payments and a fixed time period. B. fixed stream of payments and an uncertain price. C. uncertain stream of payments and a fixed price. ² D. fixed stream of payments and a fixed time period. E. uncertain stream of payments and an uncertain price. The correct answer is: fixed stream of payments and a fixed time period.

3/26/2022 Sample Test 2 - ALL SECTIONS: Attempt review https://eclass.yorku.ca/mod/quiz/review.php?attempt=3273218&cmid=1139897 11/14 Question 26 Correct Mark 1 out of 1 Question 27 Incorrect Mark 0 out of 1 Question 28 Incorrect Mark 0 out of 1 A barter economy has a problem known as Select one: A. fundamental uncertainty about the future. B. the mismatch between aggregate supply and aggregate demand. C. the double coincidence of wants. ± D. scarcity. E. mutually beneficial trade. The correct answer is: the double coincidence of wants. When cash is deposited in a chartered bank, the bank makes new loans. This, Select one: A. has no effect on currency in circulation. B. has no effect on M1+. C. increases currency in circulation. ² D. increases M1+. E. decreases M1+. The correct answer is: increases M1+. [MUST SHOW WORK] When the interest rate falls, Select one: A. the supply of money increases. B. none of the other answers are true. ² C. the supply of money decreases. D. the quantity of money supplied increases. E. the quantity of money supplied decreases. The correct answer is: the quantity of money supplied decreases.

3/26/2022 Sample Test 2 - ALL SECTIONS: Attempt review https://eclass.yorku.ca/mod/quiz/review.php?attempt=3273218&cmid=1139897 13/14 Question 32 Incorrect Mark 0 out of 1 Information Through the domestic monetary transmission mechanism, decreases in the money supply cause Select one: A. lower interest rates, which are a positive aggregate demand shock. ² B. higher interest rates, which are a positive aggregate demand shock. C. higher interest rates, which are a negative aggregate demand shock. D. higher interest rates, which are a negative aggregate supply shock. E. lower interest rates, which are a negative aggregate demand shock. The correct answer is: higher interest rates, which are a negative aggregate demand shock. Thank you for taking the test. A couple of reminders: Please remember to abide by the Academic Honesty Statement you agreed to at the beginning of this test/exam. Don't forget to upload your rough work sheet. You have 30 minutes from the test/exam end time to upload your rough work. Please make sure your rough work is in your own handwriting and that it is dark enough to read. If we can’t read it, it won’t count. If you do not upload the rough work sheet, your test/exam will not count. You will receive a zero. Thank you! Test 1 Questions Jump to... Upload your Sample Test 2 Academic Honesty Statement/Rough Work Sheet Here - ALL SECTIONS

3/26/2022 Sample Test 2 - ALL SECTIONS: Attempt review https://eclass.yorku.ca/mod/quiz/review.php?attempt=3273218&cmid=1139897 14/14