Question : 101) During the 1970s, Canada experienced an unusual pattern of : 1384351

101) During the 1970s, Canada experienced an unusual pattern of interest rates. During this period

A) the nominal interest rate was less than the real interest rate.

B) the inflation rate was negative, implying a real interest rate that was higher than the nominal interest rate.

C) the inflation rate exceeded the nominal interest rate, implying a negative real interest rate.

D) the inflation rate was negative, implying a nominal interest rate higher than the real interest rate.

E) the nominal and real interest rates were equal to each other.

102) Which of the following groups would benefit most in real terms from a period of high and unanticipated inflation, as was experienced in Canada in the early 1970s?

A) mortgage companies and banks who issued fixed-rate mortgages to clients

B) banks with outstanding loans to their customers

C) seniors whose income is largely interest earnings on past savings

D) firms that maintain large cash balances for the operation of their business

E) homeowners who had long-term fixed-rate mortgages

103) The Canadian exchange rate is defined to be the

A) number of Canadian dollars needed to buy one unit of foreign currency.

B) number of ounces of gold it takes to buy one hundred Canadian dollars.

C) system of quotas imposed on the international exchange of goods.

D) term for foreign currencies or claims on foreign currencies.

E) value of one Canadian dollar in terms of foreign currencies.

104) If the Canadian dollar exchange rate increases, the

A) Canadian dollar depreciates relative to foreign currencies.

B) internal value of the dollar falls.

C) Canadian dollar appreciates relative to foreign currencies.

D) internal value of the dollar rises.

E) external value remains unaffected.

105) If one Canadian dollar can be exchanged for 0.5 euros, we say that the Canadian-euro exchange rate is

A) 0.5.

B) 2.0.

C) 5.0.

D) 20.

E) 1.0.

106) If 0.75 U.S. dollars can be exchanged for one Canadian dollar, we say that the Canadian-U.S. exchange rate is

A) 0.75.

B) 75.

C) 1.0.

D) 1.33.

E) 1.25.

107) Suppose Canada’s exchange rate with the euro rises from 1.2 to 1.4. This rise indicates a(n) ________ of the Canadian dollar, which means it takes ________ Canadian dollars to purchase one euro.

A) appreciation; more

B) appreciation; fewer

C) depreciation; more

D) depreciation; fewer

108) Suppose Canada’s exchange rate with the U.S. dollar falls from 1.21 to 1.13. This fall indicates a(n) ________ of the Canadian dollar, which means it takes ________ Canadian dollars to purchase one U.S. dollar.

A) appreciation; more

B) appreciation; fewer

C) depreciation; more

D) depreciation; fewer

109) Suppose Canada’s exchange rate with the U.S. dollar increases from 1.14 to 1.22. Which of the following is likely to happen?

A) More Canadians will cross the border to shop in the U.S.

B) It is less expensive for Canadians to shop online from U.S. retailers.

C) Fewer Canadians will cross the border to shop in the U.S.

D) The Canadian dollar value of Canada’s imports from the U.S. will fall.

E) The Canadian dollar value of Canada’s exports to the U.S. will fall.

110) It is important for policy makers to recognize that most macroeconomic variables are characterized by

A) long-run trends and short-run fluctuations.

B) gradual increases over long periods of time.

C) short-run fluctuations that need to be smoothed for a well-functioning economy.

D) long-run economic growth.

E) the impacts of the business cycle.