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_____ Consumers have limited freedom in terms of their purchasing habits in a command economy.
_____ Every economic good is considered scarce.
_____ A point outside the production possibilities curve is unattainable given current resources.
_____ Traditional economic systems are characterized by specialization of labour.
_____ It is possible for some things to be considered productive resources and commodities.
_____ Consumers decide what will be produced in a market economy.
_____ It is possible to produce anywhere along the Production Possibilities Curve.
_____ Central planning is an important part of a market economy.
_____ Post-secondary education is a scarce good in Canada.
1. A shift along the demand curve occurs:
a)
b)
c)
d)
Because of a change in price
Because of a change in consumer preferences
Because of a change in income
Because of a change in the supply curve
3. If the price of butter increased, we would expect :
a)
b)
c)
d)
The demand for margarine to decrease
The demand for margarine to increase
The demand for margarine to remain constant
The supply of butter to decrease
4. If insects destroyed a corn crop, we would expect:
a)
b)
c)
d)
The demand curve for corn to shift to the left
The demand curve for corn to shift to the right
The supply curve for corn to shift to the left
The supply curve for corn to shift to the right
5. If the 80 computer disks were demanded at $5.00, what would be the quantity supplied at $5.00?
a) 80
b) 40
c) 160
d) The quantity supplied cannot be determined from the above information
5. If the price of ketchup increased, we would expect the following:
e)
f)
g)
h)
The demand curve for ketchup to shift to the left
The demand curve for french fries to shift to the left
The demand curve for french fries to shift to the right
Both a) and b) are correct
5. Which of the following factors will not cause a commodity to have inelastic demand?
e) The commodity has addictive properties
f) The commodity has many substitutes
g) The commodity is a necessity
h) The commodity makes up a small portion of a consumer’s budget
2. Which of the following is a progressive tax?
e)
f)
g)
h)
GST
PST
Personal Income Tax
Gasoline Tax
4. If a tax is levied that collects $500 from people with incomes of $20 000, $1 000 from people with
incomes of $40 000, and $2 000 from people with incomes of $80 000, the tax is said to be:
e)
f)
g)
h)
Progressive
Regressive
Proportional
Recessive
6. We have a federal government budget deficit when:
i)
j)
k)
l)
The national debt is increasing
Taxes are reduced
Federal government expenditures are increased
Federal government spending exceeds revenues
1. A provincial government is considering an increase in either sales tax or personal income tax.
Which of the following alternatives would be more favourable to low-income people and why?
a)
b)
c)
d)
Personal income tax, because it is collected only on investment income
Personal income tax, because it tends to take a higher percentage of income from the wealthy
Sales tax, because if falls equally on everyone
Sales tax, because rates are lower than those of income taxes
3. Which of the following is a direct tax?
i)
j)
k)
l)
GST
PST
Personal Income Tax
Gasoline Tax
2. Which of the following functions is not performed by the Bank of Canada?
a)
b)
c)
d)
Regulates the money supply
Buys and sells government bonds
Acts as the bank for the chartered banks
Provides mortgages for businesses
3. Which of the following chartered banks is not one of the “Big 6” banks?
a)
b)
c)
d)
Royal Bank
CIBC
National Bank
All are part of the “Big 6”
4. To restrict the money supply in the country, the Bank of Canada can:
a)
b)
c)
d)
Buy government bonds in the open market
Sell government bonds in the open market
Lower the bank rate
Encourage the chartered banks to loan more money
1. Which of the following is a characteristic of a command economy?
a) The economic decisions are made by the outcomes of the markets.
b) Goods produced match the wants and needs of consumers.
c) The government provides essential goods and services.
d) Anyone can own productive resources.
2. If the price of coffee were to decrease, we could expect:
a) The demand for tea to increase.
b) The demand for tea to decrease.
c) The demand for tea to stay the same.
d) None of the above.
3. A market shortage exists when:
a) Quantity demanded is greater than quantity supplied.
b) Quantity demanded is less than quantity supplied.
c) Quantity demanded is equal to quantity supplied.
d) Demand is less than supply.
4. Retail clothing stores are an example of which type of market structure?
a)
b)
c)
d)
Perfect competition
Monopolistic competition
Oligopoly
Monopoly
5. The cola industry in is an example of which type of market structure?
a)
b)
c)
d)
Perfect competition
Monopolistic competition
Oligopoly
Monopoly
6. A company in which type of market structure has the least control over prices?
a) Perfect competition
b) Monopolistic competition
c) Oligopoly
d) Monopoly
7. The GST is collected by:
a) The federal government
b) The provincial government
c) The municipal government
d) All levels of government
8. National income tax is a:
a)
b)
c)
d)
Indirect tax
Progressive tax
Direct tax
Regressive tax
9. We have a federal budget surplus when:
a) The national debt is increasing.
b) Taxes are reduced.
c) Federal government expenditures exceed revenues.
d) Federal government revenues exceed expenditures.
10. When the Bank of Canada raises the Bank Rate, they hope to:
a) Help fight unemployment
b) Expand the money supply
c) Encourage loans
d) Discourage loans
11. Canada sells its greatest amount of exports to:
a)
b)
c)
d)
U.S.A.
Mexico
European Union
Japan
12. If the value of Canada’s dollar is rising compared to the U.S. dollar, then we would expect:
a)
b)
c)
d)
American businesses to move operations out of Canada
Fewer American tourists to visit Canada
Companies that pay wages in American dollars (sports franchises) to be more competitive
All of the above to occur