CAEC: Social studies: economics

All 12 questions in this test

Every question and its answer choices. The correct answers and explanations appear when you take the test above.

1. A family grows, hunts and gathers what it needs, with little left to sell. What kind of economic activity is this?

   1. Subsistence
   2. Industrial mass production for export
   3. Large-scale retail franchising
   4. International stock market trading

2. Rosa earns $2,800 a month. Rent is $1,100, food $500, transit $150 and other bills $450. How much is left each month?

   1. $1,700
   2. $600
   3. $2,200
   4. $650

3. Jordan chooses to work an extra shift instead of attending a concert. What is the opportunity cost of his choice?

   1. The tax he will pay on his weekly pay
   2. The cost of a bus ticket to work that day
   3. The money he earned on the extra shift
   4. The concert he gave up

4. Which item is a need rather than a want?

   1. A larger television for the living room
   2. A new video game console
   3. Tickets to a professional hockey game
   4. Safe housing

5. Which institution sets Canada's key policy interest rate?

   1. The largest private bank in each province
   2. The Senate of Canada in its yearly session
   3. The Bank of Canada
   4. Each provincial finance ministry separately

6. What is inflation?

   1. A general rise in prices over time
   2. A tax added to imported goods at the border
   3. A sudden drop in the number of jobs in one city
   4. An increase in the number of banks in a country

7. If the supply of strawberries falls after a frost while demand stays the same, what usually happens to the price?

   1. It drops to zero because the crop is lost
   2. It rises
   3. It falls sharply because fewer people buy
   4. It stays exactly the same as before the frost

8. Canada's economy mixes private businesses with government services. What is this called?

   1. A mixed economy
   2. A pure command economy run by the state
   3. A traditional economy based only on custom
   4. A barter economy without any money

9. Interest rates rise. What usually happens to borrowing for homes and cars?

   1. It tends to decrease
   2. It tends to increase sharply because loans cost less
   3. It stops completely because banks close
   4. It stays the same because rates do not affect loans

10. What is the main role of a consumer in a market economy?

    1. Buying goods and services
    2. Printing money for the government
    3. Setting the national interest rate
    4. Writing the country's trade laws

11. A new video game becomes very popular, but the company made only a few copies. What is the most likely short-term result?

    1. The company is required by law to stop selling
    2. Prices fall because many copies are unsold
    3. Demand for the game drops to zero immediately
    4. Prices rise and copies sell out

12. Canada sells wheat to other countries and buys bananas from them. What is this economic activity called?

    1. International trade
    2. A subsistence economy with no surplus
    3. A local barter system between neighbours
    4. A command economy run by the government