2026-2027 ECON 1P92 Final Exam possible 107 Practice Questions and
answers multiple choice solution (Principles of Macroeconomics) Brock
University
Correct
Incorrect
Your answers
, 1 of 107
Term
What is the main reason the aggregate-demand curve slopes
downward?
a. As the price level increases, money demand increases, interest
rates increase, and investment decreases.
b. As the price level increases, money demand increases, interest
rates decrease, and investment increases.
c. As the price level decreases, money demand increases, interest
rates increase, and investment increases.
d. As the price level decreases, money demand increases, interest
rates decrease, and investment decreases.
Give this one a try later!
a. As the price level increases, a. If the Bank of Canada purchases
money demand increases, bonds in the open market, then the
interest rates increase, and money supply shifts right and the
investment increases. price level increases.
d. The opportunity cost of holding
c. that the price of a standard
money increases when the interest
hamburger should be the same
rate increases, so people desire to
everywhere
hold less money.
Don't know?
2 of 107
Term
,Which statement best characterizes the aggregate-demand curve?
a. It slopes downward because higher prices cause the exchange
rate to depreciate.
b. It slopes downward because higher prices cause real wealth to
decrease and interest rates to increase.
c. It slopes upward because higher prices cause people to increase
their production.
d. It slopes upward because higher prices cause real wealth to
increase and interest rates to decrease.
Give this one a try later!
b. The money supply increases,
d. It is the average number of times
which makes the value of money
per year a dollar is spent.
decrease
b. It slopes downward
b. It is the rate at which a person
because higher prices cause
can trade the currency of one
real wealth to decrease and
country for the currency of another.
interest rates to increase.
Don't know?
3 of 107
Term
Scenario 14-1
The economy is in long-run equilibrium. Suddenly, due to improved
international relations, a boom experienced by a major trading
partner, and the increased confidence of policymakers, citizens
become more optimistic about the future and stay this way for a
long time.
, 67. Refer to the Scenario 14-1. How does the new long-run
equilibrium differ from the original one?
a. Both the price level and real GDP are higher.
b. Both the price level and real GDP are lower.
c. The price level is the same and real GDP is higher.
d. The price level is higher and real GDP is the same.
Give this one a try later!
d. The opportunity cost of holding
money increases when the interest d. The price level is higher and
rate increases, so people desire to real GDP is the same.
hold less money.
a. As the price level increases,
d. The dollar buys less foreign
money demand increases, interest
currency, so it buys fewer foreign
rates increase, and investment
goods.
increases.
Don't know?
4 of 107
Term
In which situation do people want to hold more money?
a. when the price level and the interest rate increases
b. when the price level and the interest rate decreases
c. when the price level increases and the interest rate decreases
d. when the price level decreases and the interest rate increases
Give this one a try later!
answers multiple choice solution (Principles of Macroeconomics) Brock
University
Correct
Incorrect
Your answers
, 1 of 107
Term
What is the main reason the aggregate-demand curve slopes
downward?
a. As the price level increases, money demand increases, interest
rates increase, and investment decreases.
b. As the price level increases, money demand increases, interest
rates decrease, and investment increases.
c. As the price level decreases, money demand increases, interest
rates increase, and investment increases.
d. As the price level decreases, money demand increases, interest
rates decrease, and investment decreases.
Give this one a try later!
a. As the price level increases, a. If the Bank of Canada purchases
money demand increases, bonds in the open market, then the
interest rates increase, and money supply shifts right and the
investment increases. price level increases.
d. The opportunity cost of holding
c. that the price of a standard
money increases when the interest
hamburger should be the same
rate increases, so people desire to
everywhere
hold less money.
Don't know?
2 of 107
Term
,Which statement best characterizes the aggregate-demand curve?
a. It slopes downward because higher prices cause the exchange
rate to depreciate.
b. It slopes downward because higher prices cause real wealth to
decrease and interest rates to increase.
c. It slopes upward because higher prices cause people to increase
their production.
d. It slopes upward because higher prices cause real wealth to
increase and interest rates to decrease.
Give this one a try later!
b. The money supply increases,
d. It is the average number of times
which makes the value of money
per year a dollar is spent.
decrease
b. It slopes downward
b. It is the rate at which a person
because higher prices cause
can trade the currency of one
real wealth to decrease and
country for the currency of another.
interest rates to increase.
Don't know?
3 of 107
Term
Scenario 14-1
The economy is in long-run equilibrium. Suddenly, due to improved
international relations, a boom experienced by a major trading
partner, and the increased confidence of policymakers, citizens
become more optimistic about the future and stay this way for a
long time.
, 67. Refer to the Scenario 14-1. How does the new long-run
equilibrium differ from the original one?
a. Both the price level and real GDP are higher.
b. Both the price level and real GDP are lower.
c. The price level is the same and real GDP is higher.
d. The price level is higher and real GDP is the same.
Give this one a try later!
d. The opportunity cost of holding
money increases when the interest d. The price level is higher and
rate increases, so people desire to real GDP is the same.
hold less money.
a. As the price level increases,
d. The dollar buys less foreign
money demand increases, interest
currency, so it buys fewer foreign
rates increase, and investment
goods.
increases.
Don't know?
4 of 107
Term
In which situation do people want to hold more money?
a. when the price level and the interest rate increases
b. when the price level and the interest rate decreases
c. when the price level increases and the interest rate decreases
d. when the price level decreases and the interest rate increases
Give this one a try later!
