Chapter 8 The Economy of Canada
Multiple-Choice Questions
1. Economics: a. is the study of the exchange of goods and services b. is about deciding how to meet basic needs and desires of people c. involves the flow of money d. all of these e. a and c only
2. As prices drop, supply: a. stays the same b. increases c. decreases d. is unaffected
3. As prices rise, demand: a. stays the same b. increases c. decreases d. is unaffected
4. Winter clothing is offered at sale prices: a. in early autumn b. in late winter c. in the spring d. in early winter
5. Which of the following is not one of the basic economic questions? a. What is to be produced? b. How is it to be produced? c. When is it to be produced? d. For whom is it to be produced?
6. Which level of economic activity involves extracting resources? a. primary b. secondary c. tertiary d. quaternary

7. Which level of economic activity involves processing and manufacturing goods? a. primary b. secondary c. tertiary d. quaternary
8. Which level of economic activity involves the providing of services? a. primary b. tertiary c. secondary d. quaternary
9. Which level of economic activity involves the creation and transfer of ideas? a. primary b. secondary c. quaternary d. tertiary
10. Which sector of the economy is showing the most rapid growth in
Canada? a. primary b. secondary c. tertiary d. quaternary
11. Canada is described as having a: a. resource-based economy b. land resource based economy c. human resource based economy d. capital based resource economy
12. Which of the following is used to assess the state of the economy? a. unemployment rates b. the Consumer Price Index c. the Gross Domestic Product d. all of these e. a. and b. only

13. Which of the following is a capital resource? a. technology b. land c. factory workers d. research scientists
14. Which of the following is a land resource? a. technology b. water c. fish d. both b. and c.
15. Which of the following is a human resource? a. educators b. education facilities c. forests d. land
16. Which of the following is not an example from the primary economic sector? a. yarn b. logging c. fish d. wool
17. Which of the following is not an example from the primary manufacturing sector? a. yarn b. furniture c. lumber d. cleaning
18. Which of the following is not an example from the secondary manufacturing sector? a. fish sticks b. fishing c. furniture making d. sweater

19. Which of the following is not an example of the tertiary economic sector? a. sales b. marketing c. design d. furniture making
20. Which of the following is not an example of the quaternary economic sector? a. design b. transport c. testing d. research
21. GDP measures: a. all services produced in a country in a period of time b. all goods produced in a country in a period of time c. the market value of all goods and services produced in a country in a period of time d. the wholesale values of all goods and services produced in a country in a period of time
22. Which of the following sequences represents the business cycle correctly? a. slowdown – recession – prosperity – recovery b. recovery – recession – slowdown – prosperity c. recovery – prosperity – recession – slowdown d. slowdown – recession – recovery – prosperity
23. What was the commodity on which Atlantic Canada’s economy was
first based? a. lumber b. furs c. shipbuilding d. fish
24. Agriculture is important in which of the following Atlantic provinces? a. P.E.I. and New Brunswick b. New Brunswick and Nova Scotia c. Newfoundland and P.E.I. d. P.E.I. and Nova Scotia

25. At Confederation, what proportion of Canada’s coal was produced on Cape Breton Island? a. one half b. one third c. two thirds d. three quarters
26. Which industry declined in Atlantic Canada in the later 19th century? a. farming b. fishing c. shipbuilding d. forestry
27. Which industry has collapsed in Atlantic Canada in the late 20th century? a. farming b. forestry c. tourism d. fishing
28. Which industry in Atlantic Canada shows promise for the 21st century? a. shipbuilding b. oil and gas c. fishing d. forestry
29. Which of the following is a major component of the economy of the
Great Lakes–St. Lawrence region? a. fishing b. manufacturing c. mining d. forestry
30. Most of Canada’s wealth is concentrated in which economic region? a. Canadian Shield b. Atlantic Canada c. Prairies d. Great Lakes–St. Lawrence

31. A rapidly expanding economic sector in the Great Lakes–St.
Lawrence region is: a. textiles b. auto making c. high tech d. fishing
32. The largest economic region in Canada by area is: a. Cordillera b. Canadian Shield c. the North d. the Maritimes
33. The economic sector that is unimportant in the Canadian Shield region is: a. mining b. forestry c. agriculture d. tourism
34. The dominant industry on the Canadian Shield at the time of
European contact was: a. fishing b. fur trapping c. mining d. forestry
35. The major economic sectors on the Canadian Shield today are: a. forestry and trapping b. forestry and mining c. mining and agriculture d. forestry and agriculture
36. The effects of the business cycle are pronounced in the Canadian
Shield region because: a. commodity prices are set by the world market b. forest production is set by the government c. pollution requires expensive solutions d. agriculture is subject to the effects of climate

37. Towns with only one resource are vulnerable because: a. they are geographically isolated b. if the resource runs out, there is no further need for the town c. resources are heavily taxed d. life in resource towns is dull
38. In order to survive, resource towns must: a. seek new resources b. diversify their economies c. attract new resource investment d. apply for government relief
39. The most important economic sector in the North region is: a. services b. minerals c. fish d. furs
40. The newest resource to be exploited in the North is: a. oil and gas b. coal c. diamonds d. iron ore
41. The major barrier to development in the North is: a. a lack of workers b. isolation c. the fragile environment d. extreme cold
42. Which world region has warmed most rapidly over the past three decades? a. Antarctic b. Temperate Zones c. Arctic d. Equatorial Zones
43. A warming environment in the Arctic will: a. cause disruption of existing buildings and infrastructure b. provide easier access to the region c. create more environmental stress in the region d. all of these e. a. and b. only

44. The dominant crop on the Prairies in the early 20th century was: a. potatoes b. rye c. canola d. wheat
45. A rise in rail freight rates on the Prairies in the 1990s led to: a. economic collapse b. diversification of crops c. increased reliance on a single cash crop d. widespread protests
46. The major mineral resource on the Prairies is: a. coal b. petroleum c. iron ore d. precious metals
47. Which mineral resource on the Prairies is experiencing increased global demand? a. oil b. natural gas c. coal d. potash
48. Work shortages due to the business cycle are: a. cyclical b. seasonal c. frictional d. structural
49. Work shortages due to being temporarily unemployed are: a. cyclical b. seasonal c. frictional d. structural
50. Work shortages due to a permanent decline in an economic sector are: a. cyclical b. seasonal c. frictional d. structural

51. Which of the following describes frictional unemployment? a. it is seasonal in nature b. it refers to temporary unemployment c. it refers to jobs which are lost forever d. it refers to layoff due strike action
52. Which of the following describes cyclical unemployment? a. it is seasonal in nature b. it refers to temporary unemployment c. it refers to jobs which are lost forever d. it refers to jobs lost to layoffs
53. Which of the following describes structural unemployment? a. it is seasonal in nature b. it refers to temporary unemployment c. it refers to jobs which are lost forever d. it refers to layoffs due to strike action
54. Which age group is growing most rapidly as a percentage of the total population? a. under 21 b. 25–44 c. 35–49 d. over 60
55. Because of an increasing number of retirees: a. opportunities for young workers are growing b. many sectors are reporting job shortages c. many retirees have returned to work d. all of these e. b. and c. only
56. Outsourcing means: a. obtaining products your nation does not produce b. exporting jobs to a cheaper labour market c. having another company make specific components for your product d. having a specific plan for finding new markets for your products

57. A branch plant is one which: a. produces wood products b. is owned by a company based in Canada c. is owned by several shareholders d. is owned by a company not based in Canada
58. Branch plants are established so that companies can avoid: a. taxes b. tariffs c. decline in sales d. the effects of the business cycle
59. American companies established branch plants in Canada in the early 20th century: a. at the invitation of the Canadian government b. to get around National Policy tariffs c. to sell American goods made in Canada to Canadians d. to help improve the Canadian economy e. both b. and c.
60. A branch plant: a. is controlled by foreign interests b. does little research and development c. provides jobs for Canadian workers d. all of these
61. A trade relationship which has built in safeguards to ensure compliance with negotiated terms is: a. reciprocity b. regulated c. free d. managed
62. The use of tariffs and quotas to restrict imports is called: a. anti-globalization b. isolationism c. protectionism d. nationalization
63. An example of American disregard for the Free Trade Agreement: a. the Auto Pact b. American branch plants c. the Softwood Lumber Dispute d. American quotas on fish imports

64. The Auto Pact is an example of: a. branch-plant operations b. reciprocity c. total free trade d. sectoral free trade
65. With the North American Free Trade Agreement, North America is becoming a: a. trading bloc b. customs union c. single integrated economy d. an internal tariff zone
66. Since the Free Trade Agreement with the United States in 1988,
Canadian exports to the United States, as a percentage of all exports, have: a. increased b. stayed the same c. declined d. declined sharply
67. Which of the following Canadian economic sectors are exempt from the provisions of the Free Trade Agreement? a. textiles b. cultural c. forestry d. mining
68. The sector of the Canadian economy which has declined since the
Free Trade Agreement was signed is: a. agriculture b. resource exploitation c. services d. manufacturing
69. Canada has not signed a Free Trade Agreement with which other nation? a. Colombia b. Chile c. Cuba d. Peru

70. Which of the following is a problem with free trade with Mexico? a. a poor human rights record in Mexico b. low labour costs in Mexico c. low levels of environmental protection in Mexico d. all of these