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Name: __________________________ Date: _____________
Page 1
7. Which is a microeconomic question, rather than a macroeconomic question?
A) Will a decrease in the income tax rate lift the nation out of a recession?
B) Will an increase in consumer spending cause inflation?
C) Will a decrease in the income tax rate lead to a government budget deficit?
D) Will an increase in the cigarette tax reduce the number of packs sold?
8. How the actions of individuals and firms interact to produce a particular economy-wide
level of performance is the focus of:
A) macroeconomics.
B) fiscal policy.
C) monetary policy.
D) microeconomics.
Page 2
13. Promotion of employment and growth in the economy as a whole is the focus of:
A) macroeconomics.
B) fiscal policy.
C) monetary policy.
D) microeconomics.
14. If all of the households and businesses start saving more during economic hard times,
then aggregate income will fall, hurting everyone in the economy. This is known as the:
A) quantity theory.
B) crowding-out theory.
C) paradox of thrift.
D) permanent income hypothesis.
15. The concept that the whole is greater than the sum of its parts best characterizes:
A) microeconomics.
B) supply and demand.
C) macroeconomics.
D) business forecasting.
16. A key insight into macroeconomics is that in the short run the combined effect of
individual decisions:
A) is always the same as what one individual intended.
B) may be very different from what any one individual intended.
C) is always beneficial to the economy as a whole.
D) is always detrimental to the economy as a whole.
18. What do a rubber-necking traffic jam and the paradox of thrift have in common?
A) Individual behavior has large negative consequences for the whole of society.
B) Seemingly bad behavior ends up harming everyone.
C) Seemingly careless behavior leads to good times for all.
D) Government intervention can only make matters worse.
Page 3
19. In the paradox of thrift:
A) firms that are pessimistic about the future lay off the most saving-conscientious
workers.
B) when families and business are feeling pessimistic about the future, they spend
more.
C) increased saving by individuals increases their chances of becoming unemployed.
D) risky behavior during economic tough times has large negative consequences for
society.
20. In contrast to the conclusions drawn from microeconomics, many economists argue that
in macroeconomics, government:
A) control of rent prices increases overall economic activity.
B) intervention in markets usually leaves society as a whole worse off.
C) taxation of goods and services does not cause a deadweight loss of economic
welfare.
D) intervention in markets can prevent or reduce the effects of adverse events on the
macroeconomy.
21. The view that the government should take an active role in the macroeconomy dates to:
A) the Seven Years' War.
B) World War I.
C) the Great Depression.
D) the Vietnam War.
23. The modern macroeconomic tools used by the government are _____ policy and _____
policy.
A) tax; antitrust
B) fiscal; monetary
C) monetary; exchange rate
D) capital; labour
Page 4
24. Changing interest rates is an example of _____ policy.
A) fiscal
B) tax
C) monetary
D) exchange rate
25. Fiscal policy refers to changes in _____ to affect overall spending in the economy.
A) interest rates
B) government spending and taxation
C) the quantity of money
D) interest rates and of government spending
26. The economist whose writings in the 1930s argued that the cause of an economic
depression is inadequate spending was:
A) Herbert Hoover.
B) John Maynard Keynes.
C) Andrew Mellon.
D) Joseph Schumpeter.
29. In 1936 economic theory changed dramatically with the publication of:
A) The General Theory of Employment, Interest, and Money, by John Maynard
Keynes.
B) The Wealth of Nations, by Adam Smith.
C) The Road to Serfdom, by F. A. Hayek.
D) Principles of Economics, by Paul Samuelson.
Page 5
30. The central mission of modern macroeconomics is to prevent:
A) shortages.
B) surpluses.
C) high gas prices.
D) a deep recession like the Great Depression.
32. Fiscal policy attempts to affect the level of overall spending by making changes in:
A) the interest rate.
B) the money supply.
C) banking regulations.
D) taxes and spending.
33. Monetary policy attempts to affect the overall level of spending by making changes in:
A) taxes.
B) taxes and spending.
C) taxes and interest rates.
D) interest rates and the quantity of money.
34. Monetary policy attempts to affect the overall level of spending through:
A) changes in the inflation rate.
B) changes in the quantity of money and the interest rate.
C) changes in tax policy or government spending.
D) discretionary regulation of profits and wages.
35. Fiscal policy attempts to affect the overall level of spending through:
A) changes in the inflation rate.
B) changes in the quantity of money or the interest rate.
C) changes in tax policy or government spending.
D) discretionary regulation of profits and wages.
Page 6
36. If macroeconomic policy has been successful over time, it is likely that the economy has
NOT seen:
A) any inflation.
B) any severe recessions.
C) any unemployment.
D) a business cycle.
39. When the Great Depression reached its trough in 1933, the unemployment rate was
approximately _____%.
A) 5
B) 10
C) 20
D) 50
Page 7
41. The General Theory of Employment, Interest, and Money, written by _____ and
published in _____, transformed the way economists thought about macroeconomics.
A) Milton Friedman; 1946
B) Paul Samuelson; 1940
C) John Maynard Keynes; 1936
D) Paul Lucas; 1966
42. The General Theory of Employment, Interest, and Money was written by:
A) Robert Lucas.
B) David Ricardo.
C) John Maynard Keynes.
D) Thomas Malthus.
44. In recent times, the Canadian government has been trying to help the economy through
one of the worst economic slumps ever. The policies used are based on _____ theory.
A) Keynesian
B) classical
C) supply-side
D) trickle-down
46. A change in the level of overall spending in the economy due to a change in the interest
rate, brought about by a change in the quantity of money, is an example of _____
policy.
A) monetary
B) fiscal
C) free-market
D) trickle-down
Page 8
47. Changing government spending and taxes to affect overall spending is use of _____
policy.
A) tax-and-spend
B) monetary
C) fiscal
D) free-trade
49. Periods in which output and employment are falling in many industries are called:
A) recessions.
B) booms.
C) expansions.
D) deflations.
52. The short-run alternation between economic downturns and recessions, then economic
upturns and expansions is known as the _____ cycle.
A) business
B) contractionary
C) expansionary
D) disequilibrium
Page 9
53. If during several quarters, the economy is simultaneously increasing its levels of output
and employment, then the economy is in a(n):
A) depression.
B) expansion.
C) recession.
D) turning point between a recovery and a downturn.
Page 10
59. Economists have identified several consecutive quarters of falling employment, and
forecasts for the next few months suggest more of the same. The economy is at the
_____ stage of the business cycle.
A) recession
B) expansion
C) peak
D) trough
60. For the past several months, per capita output has increased at a slower and slower rate.
Over the same period, the unemployment rate has been falling, but it appears that both
have leveled off. Where in the business cycle is the economy?
A) peak
B) recession
C) trough
D) expansion
61. The point at which a recession ends and the expansion begins is called the:
A) trough.
B) downturn.
C) peak.
D) lag.
Page 11
65. A pattern of expansion, then recession, then expansion again is a(n):
A) annual trend.
B) secular trend.
C) business cycle.
D) consumer cycle.
66. The point on a business cycle when real GDP stops rising and begins falling is a(n):
A) peak.
B) trough.
C) expansion.
D) recession.
67. The point on a business cycle when real GDP stops falling and begins rising is a(n):
A) peak.
B) expansion.
C) trough.
D) recession.
69. Rising total output accompanied by increasing employment is generally known as a(n):
A) stagflation.
B) recession.
C) inflation.
D) expansion.
70. A country's real gross domestic product (GDP) undergoes periodic fluctuations called
a(n):
A) recession.
B) business cycle.
C) expansion.
D) trough.
Page 12
Use the following to answer questions 71-72:
71. (Figure: The Business Cycle) Point B on this graph shows a(n):
A) peak.
B) trough.
C) expansion.
D) recession.
72. (Figure: The Business Cycle) The movement from point B to C is called a(n):
A) trough.
B) expansion.
C) depression.
D) peak.
Page 13
75. The most painful effect of a recession is:
A) inflation.
B) unemployment.
C) money neutrality.
D) liquidity trap.
77. In many countries, economists adopt the rule that a recession is a period of at least
_____ during which aggregate output falls.
A) one quarter
B) two consecutive quarters
C) three consecutive quarters
D) a full year
78. The most widely used indicator of the conditions in the labour market is the:
A) unemployment rate.
B) population growth rate.
C) inflation rate.
D) trade deficit.
79. The _________ is the most widely used indicator of the conditions in the labour market.
A) trade deficit
B) population growth rate
C) inflation rate
D) unemployment rate
Page 14
81. According to official statistics for Canada, since the Great Depression:
A) economists are confident that the business cycle has been tamed.
B) the economy has constantly had positive real GDP growth rates.
C) the economy had longer recessions than expansions only during the 1960s and
1990s.
D) the economy has not had another severe and prolonged economic downturn
comparable to it.
86. Historical evidence shows that for determining a country's living standards, over:
A) an extended period, long-run growth is just as important as the business cycle.
B) short periods, long-run growth is less important than the business cycle.
C) an extended period, long-run growth is much more important than the business
cycle.
D) long periods, it is difficult to determine whether the business cycle or long-run
growth is more important.
Page 15
87. An increase in the nation's _____ is generally accepted as a long-run indicator of a
rising standard of living.
A) output per person
B) unemployment rate
C) inflation rate
D) trade deficit
Page 16
93. Which statement is TRUE?
A) In the past century, the population of Canada has grown faster than output.
B) Long-run growth models and business cycle models are the same.
C) Since World War II, the economy of Argentina has grown faster than the economy
of Canada.
D) The level of saving is important for long-run growth.
95. Inflation:
A) is a movement of the economy toward economic growth.
B) can be thought of as an increase in a nation's standard of living.
C) is a sustained fall in the overall level of prices.
D) is an increase in the overall level of prices.
96. If the economy grew at 3% this year and average prices increased _____, people would
be better off this year than the last year.
A) by 3%
B) faster than 3%
C) less than 3%
D) faster than 10%
97. If wages grew at 5% last year and average prices grew at 3%, then the average worker:
A) is better off.
B) is worse off.
C) has lost purchasing power.
D) is unaffected.
Page 17
98. If workers' nominal wages have risen by 50% over a 10 years and prices have increased
by 40% in that same period, then we can safely conclude that the amount of goods and
services workers can buy has:
A) fallen.
B) increased.
C) not changed.
D) decreased in quality.
101. The annual percentage change in the aggregate price level is negative when there is:
A) deflation.
B) disinflation.
C) inflation.
D) spiraling inflation.
103. Inflation:
A) raises the cost of making purchases.
B) can result in a decrease in barter transactions.
C) encourages people to hold cash.
D) makes borrowers worse off.
Page 18
104. Deflation:
A) raises the cost of making purchases.
B) makes borrowers better off.
C) encourages people to hold cash rather than invest.
D) is caused only by changes in interest rates.
105. With regard to the aggregate price level, economists generally believe that:
A) price stability is desirable.
B) inflation is worse than deflation.
C) deflation is worse than inflation.
D) inflation benefits most retired people.
Page 19
110. If a country sells more goods and services to the rest of the world than it purchases from
the other countries, then the country has a:
A) trade deficit.
B) budget deficit.
C) trade surplus.
D) budget surplus.
111. If a country has a trade deficit, does it indicate that the country has a serious problem?
A) No. Trade deficits occur when a country's investment spending is higher than its
level of saving.
B) Yes. Trade deficits occur when a country has low productivity.
C) Yes. Trade deficits occur when a country does not have a comparative advantage in
production.
D) Yes. Trade deficits occur when a country has a high budget surplus.
112. Goods and services that are produced in a foreign country but consumed domestically
are called:
A) exports.
B) imports.
C) investment goods.
D) consumer durables.
114. A nation whose value of imports exceeds its value of exports is said to have:
A) hyperinflation.
B) a trade deficit.
C) price stability.
D) a trade surplus.
Page 20
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dans cette écume gelée, cherchant les places où elle était demeurée
intacte, plus profonde et plus blanche. Et il s’agitait, ruait, faisait des
mouvements de frotteur qui cire un plancher.
Je demeurai stupéfait.
Je murmurai:
—Ah çà! tu perds la tête?
Il répondit sans s’arrêter: «Pas du tout, je me lave les pieds.
Figure-toi que j’ai levé la belle Sylvie. En voilà une chance! Et je
crois que ma bonne fortune va s’accomplir ce soir même. Il faut
battre le fer pendant qu’il est chaud. Moi, je n’avais pas prévu ça,
sans quoi j’aurais pris un bain.»
Pol conclut: «Vous voyez donc que la neige est utile à quelque
chose.»
É
TENDU sur un des divans qui servent aussi de couchette, dans le
petit yacht de mon ami Berneret, je parcourais un livre de
bord, tandis que lui dormait de tout son cœur, en face de moi.
C’était un garçon bizarre, un sauvage qui, depuis dix ans, n’avait
guère quitté son bateau, un cotre de vingt tonneaux nommé
Mandarin.
Chaque été il parcourait les côtes du Nord de France, de
Belgique, de Hollande ou d’Angleterre, et, chaque hiver, les côtes de
la Méditerranée, l’Algérie, l’Espagne, l’Italie, la Grèce.
Il aimait ce bercement solitaire sur le flot toujours agité.
La terre immobile l’ennuyait, et les hommes bavards
l’exaspéraient.
Ils sont ainsi quelques-uns, vivant dans cette boîte remuante,
étroite et longue, qu’on nomme un yacht. On les voit arriver dans un
port, au coucher du soleil. De son pont, l’homme en casquette bleue
regarde de loin le mouvement humain sur le quai; puis il marche,
jusqu’à la nuit, d’un pas vif et régulier, d’un bout à l’autre de son
bateau.
Au point du jour, le lendemain, on ne l’aperçoit plus; il est reparti
sur la mer, il fuit, il flotte, il rêve ou il dort. Il est seul.
Six mois plus tard, on le revoit très loin de là, dans un autre port,
sous un autre ciel, errant encore, errant toujours.
Bien que Berneret fût un vieux camarade, il demeurait une
énigme pour moi. C’était donc avec une curiosité très éveillée et très
vive que je lisais son livre de bord.
Pendant qu’il dormait j’en ai copié trois pages.
20 mai, Saint-Tropez.—Rien. J’ai passé une de ces journées
délicieuses où l’âme semble morte dans le corps bien vivant. Un
léger vent d’ouest nous a poussés des Salins-d’Yères à Saint-
Tropez, d’une façon douce et régulière, sans une vague, sans une
oscillation. Nous glissions sur la mer plate, bleue, une mer qu’on
voudrait embrasser et où on se baigne avec tendresse, pour sentir
sur la peau sa caresse un peu fraîche.
A cinq heures le Mandarin, qui avait laissé arriver vent arrière
pour gagner l’entrée du golfe de Grimaud, vira de bord et approcha
du port bâbord amures. La brise tombait tout à fait; mais, comme il
portait son grand flèche de beau temps, le cotre filait encore assez
vite. Il passa deux tartanes et une goélette faisant même route que
nous.
Le golfe de Grimaud s’enfonce dans la terre comme un lac
magnifique entouré de montagnes couvertes de forêts de pins.
A l’entrée, Saint-Tropez à gauche, Saint-Maxime à droite. Tout au
fond, Grimaud, ancienne cité bâtie en partie par les Maures autour
d’un mont pointu qui porte sur son faîte l’antique château des
Grimaldi.
Nuit excellente à Saint-Tropez.
21 mai.—Levé l’ancre à trois heures du matin, pour profiter du
courant d’air de Fréjus; ce fut à peine un souffle qui nous conduisit
au large, puis plus rien. A huit heures nous n’avions pas fait deux
milles, et je compris que je coucherais en mer si je n’armais pas
l’embarcation pour remorquer le yacht.
Je fis donc descendre deux hommes dans le canot, et à trente
mètres devant nous ils commencèrent à nous traîner. Un soleil
enragé tombait sur l’eau, brûlait le pont du bateau, nous écrasait
sous une chaleur si lourde qu’il fallait, pour lever le bras, faire un
effort considérable.
Les deux hommes, devant nous, ramaient d’une façon très lente
et régulière, comme deux machines usées qui ne vont plus qu’à
peine, mais qui continuent sans arrêt leur effort mécanique de
machines.
Enveloppé dans un gandoura d’Alger, en soie blanche, fine et
légère, qui frôlait ma peau presque sans la toucher, étendu sur des
coussins sous la tente, au pied du mât, j’ai rêvassé pendant six
heures de suite.
Plus je vieillis, plus l’agitation humaine me semble sotte et
puérile. Quand je songe que de grosses émotions bouleversent un
pays entier, je veux dire les classes éclairées, c’est-à-dire les plus
niaises, parce qu’une chanteuse, un soir, a été soupçonnée d’avoir
bu un verre de champagne de trop, avant d’entrer en scène!
Vers trois heures de l’après-midi, nous avions doublé la pointe du
Drammond, et nous nous présentions à l’entrée de la rade d’Agay.
Pages.
Sur l’Eau 1
Blanc et Bleu (inédit) 181
Livre de bord (inédit) 193
Au lecteur
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