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4) When the nominal interest rate is constant, ________ in the growth rate of the money supply ________ the inflation rate, and ________ the debt-to-GDP ratio. A) an increase; increases; increases B) an increase; decreases; increases C) a decrease; decreases; decreases D) a decrease; decreases; increases 5) A decrease in the inflation rate will lead.
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15.5   A Short-Run IS-MP Model of an Open Economy with a Floating Exchange Rate 1) An increase in the real interest rate in the United States will cause the dollar to ________ relative to other currencies and ________ net exports and real GDP. A) appreciate; increase B) appreciate; reduce C) depreciate; increase D) depreciate; reduce 2).
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Article Summary   In a report entitled “Surveying the Aftermath of the Storm,” the Federal Reserve announced that household wealth for the average American family fell by 23% between 2007 and 2009, with median net worth declining from $125,000 to $96,000. On average, stock portfolios decreased in value by more than one-third.
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14) Maryanne expects to work for another 30 years and expects to live another 10 years after she retires. If Maryanne completely smooths consumption over her lifetime, her marginal propensity to consume out of wealth is A) 0.025. B) 0.033. C) 0.075. D) 0.10. 15) Households in the United States more completely smooth out expenditures.
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MULTIPLE CHOICE 1.Politics as an activity can be defined as a process of influencing, making, and implementing _________. a.collective decisions b.individual responsibility c.harm reduction d.survival mechanisms 2.Those in governing positions who possess the right to exercise power are said to have __________. a.values b.authority c.identities d.unity 3.A country whose governing institutions are able to make and enforce binding rules for people.
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17) The U.S. National Commission on Fiscal Policy and Reform has recommended changes to government expenditures and taxes which they claim would reduce the increase in the national debt between 2012 and 2020 to $4 trillion rather than $8 trillion. What are the commission's 5 recommendations? 18) For each of the.
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11) Refer to Table 13.2. For Garbanzo, the total federal debt owned by federal government agencies in 2011 is A) $1,225 billion. B) $1,325 billion. C) $1,610 billion. D) $1,875 billion. 12) Refer to Table 13.2. For Garbanzo, the total federal debt owned by private investors in 2011 is A) $265 billion. B) $550 billion. C) $650 billion. D).
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5) If the central bank is facing the zero bound constraint and announces a higher inflation target, A) the real interest rate will increase, which will decrease aggregate expenditure. B) the real interest rate will decrease, which will increase aggregate expenditure. C) the nominal interest rate will increase, which will decrease aggregate expenditure. D).
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TRUE/FALSE 1.The NAFTA agreement ensures that Canada is exempted from American trade remedy laws. 2.The NAFTA agreement creates a “supranational” government with institutions to oversee rules in North America. 3.The Canadian government reviews proposals from foreigners to take over Canadian businesses. 4. Class consciousness is relatively high in Canada. 5. Young women are now more.
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14.1   The Macroeconomic Implications of Microeconomic Decision Making: Intertemporal Choice 1) If a borrower does not have the resources to make a down payment or the ability to post collateral, and is therefore unable to obtain a loan even when he is willing to pay the current interest rate, the borrower.
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11.Which among the following is a Crown (state-owned) corporation? a.VIA Rail b.Nortel Networks c.Inco d.BlackBerry 12.In recent years, Canada and the United States have been at odds over _________. a.development assistance b.cross-border regions c.softwood lumber d.the Great Lakes 13.Who among the following would be most likely to support a“welfare state”? a.John Maynard Keynes b.Brian Mulroney c.Ronald Reagan d.Stephen Harper 14.In the 1970s, the Keynesian economic.
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  Article Summary   On June 2, 2011, Moody's Investor Services warned that it may downgrade the U.S. government's debt rating unless a “credible agreement on substantial deficit reduction” was reached between Congress and the president by the middle of July. This comes just two months after Standard and Poor's decision to change.
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12.4   Rational Expectations and Policy Ineffectiveness 1) Suppose the Fed has a target inflation rate of 3%, the Fed always hits its target, and the inflation rate has been 3% for several  years. Furthermore, assume Amazon sets the price of its Kindle at $140 in 2011 and wants to keep the.
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MULTIPLE CHOICE 1.The text describes three ways that Canadian history can be studied. One way is in terms of Canada’s evolution from colony to nation. Another way is Canada’s_________. a.relationshipwith the United States b.performance in the two World Wars c.judicial and legal system d.evolutionary democracy 2.What was one of the chief effects of the Royal Proclamation,.
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13.1   Debt and Deficits in Historical Perspective 1) The government's budget constraint is best represented by which of the following equations? A) Government purchases of goods and services + Transfer payments + Interest payments on existing debt = Tax revenue + Newly issued government bonds + Seigniorage B) Government purchases of goods and.
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24) The substitution effect indicates that higher real interest rates ________ current consumption for households who are lenders and ________ current consumption for households who are borrowers. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease 25) An increase in real interest rates will  ________ current consumption for households who are lenders.
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13.4   The Fiscal Challenges Facing the United States 1) The main fiscal policy challenge for the future in the United States is rising expenditures on A) transfer programs. B) education. C) national defense. D) the net interest on the federal debt. 2) From 2010 until 2084, the CBO projects that, as a percentage of GDP, government.
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8) Explain the difference between the Fed following discretionary policy and the Fed following a rules strategy. 9) What are the primary arguments in favor of a rules approach, and what are the primary arguments in favor of a discretion approach? 10) Explain how discretionary monetary policy may have brought about the.
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4) According to the permanent-income hypothesis, A) the present value of lifetime consumption equals the present value of lifetime income. B) the income earned in a lifetime will be evenly divided between consumption and saving. C) household consumption depends on income that households expect to receive each year, and financial markets are.
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4) Sources of foreign currency demand for the U.S. dollar include all of the following except A) foreign firms and households that want to buy goods and services produced in the United States. B) foreign firms and households that want to invest in the United States through foreign portfolio investment. C) foreign firms.
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14.3   Factors That Determine Private Investment 1) John Maynard Keynes described periods of irrational pessimism and optimism that affect the investment behavior of firms as animal spirits. When considering the investment behavior of firms, animal spirits can be thought of as changes in the A) actual marginal product of capital. B) capital.
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15) Refer to Figure 12.4. Suppose the economy is initially at long-run equilibrium and the economy experiences a demand shock such as a stock market crash. The economy then reaches a new, short-run equilibrium point. Assuming expectations are adaptive, this will allow the central bank to decrease the real interest.
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44) The effects of tax incentive programs such as IRAs and 401(k) accounts suggest that these government programs designed to increase saving lead to A) a decrease in the private capital stock B) decreased labor productivity. C) an increase in the standard of living. D) an increase in the real interest rate. 45) Explain the.
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  TRUE/FALSE 1.Aboriginal rights, including the ownership of lands they inhabit, were first protected by the Act of Union in 1840. 2.In 1868, the Nova Scotia legislature passed a motion to secede from Canada. 3.Responsible government is a system in which the powers of the legislature are limited by plebiscites and referendums. 4.The unification of.
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MULTIPLE CHOICE 1.The Canadian economy has been described by economic historians as _________ based. a.staples b.revenue c.import d.low-cost 2.In what sector were the bulk of Canadians employed in 2011? a.Manufacturing b.Services c.Transportation d.Forestry 3.In 2001, the death of Kimberly Rogers in her Ontario apartment revealed that government is sometimes not sympathetic to people in poverty. What was the key issue in.
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15.1   The Balance of Payments 1) Which of the following transactions would be included in Germany's current account? A) A German citizen purchases a new BMW made in Germany. B) An American citizen purchases 500 shares of BMW stock. C) A German citizen purchases 500 shares of eBay stock. D) An American citizen purchases a.
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11) The White House's deficit commission has proposed several ways for the government to reduce the federal budget deficit, including raising the retirement age for Social Security. Other things equal, raising the retirement age for Social Security would tend to ________ the supply of labor and ________ the equilibrium wage.
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13.3   Effects of Budget Deficits on Investment 1) The government's budget deficit is financed by some combination of all of the following except A) increased private saving. B) increased transfer payments. C) net exports. D) reduced private investment expenditure. 2) If the government decreased income taxes by $500 billion and does not pursue a policy change,.
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11.Liberal democracy is a political system based on, among other things, fair elections that involve free competition. What is one other key defining feature of liberal democracy? a.Government that is limited by law. b.Arbitrary government decision making. c.Unlimited and absolute majority rule. d.A system that prevents consensus. 12.Deliberative democracy is different from plebiscitary democracy because.
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  TRUE/FALSE 1.The collective decisions of a political community tend to mirror the distribution of political power. 2.The idea of deliberative democracy has made little impact on the processes of government decision making in Canada. 3.Political parties have become less democratic in their organizational structure. 4.Liberal democracy necessarily involves establishing a private sphere where government.
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  Figure 15.5     Panel (a)Panel (b)   9) Refer to Figure 15.5. Under a fixed exchange rate system, an expansionary fiscal policy would best be represented by a movement from ________ in Panel (a) and a movement from ________ in Panel (b). A) point A to point B; point X to point Y B) point B.
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21) Since 1962, which of the following federal expenditures, measured as a percentage of GDP, has decreased? A) Social Security B) Medicare and Medicaid C) net interest D) defense 22) Since 1962, which of the following federal expenditures, measured as a percentage of GDP, has increased the most? A) Social Security B) Medicare and Medicaid C) net interest D).
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14) Explain when, under a fixed exchange-rate system, expansionary monetary policy may no longer be effective in stimulating the economy. Use the IS-MP model and the net capital outflow curve to support your answer. 15.7   The Policy Trilemma for Economic Policy 1) Which of the goals pursued by policymakers in an open.
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11. Which was the last province to join Confederation? a.Manitoba b.British Columbia c.Yukon d.Newfoundland 12. Power over _________was still retained by the British government following Confederation. a.natural resources b.foreign policy c.civil law d.human rights 13. What was Prime Minister John A. Macdonald’s National Policy? a.A program to keep oil prices below the international level b.A statute that formalized Canada’s independence from imperial.
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21) For each of the following scenarios, state the short-run effect on the AD curve. a. The price level decreases. b. The target inflation rate increases. c. The U.S. dollar falls in value relative to other currencies. d. Government spending increases. e. The Fed becomes more tolerant of deviations from the target inflation rate. 22) Explain.
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