Question 1

Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent.Then cyclical unemployment is

Accepted Answer

A) 1 percent. 
B) -1 percent. 
C) 8 percent. 
D) 0 percent. 
E) 3.5 percent. 
A) 1 percent. 
B) -1 percent. 
C) 8 percent. 
D) 0 percent. 
E) 3.5 percent.

Question 2

Henelyn lost her job as a factory worker when she was replaced by a robotic machine.Now she is looking for a new job.Henelyn is

Accepted Answer

A) frictionally unemployed. 
B) structurally unemployed. 
C) not unemployed. 
D) cyclically unemployed. 
E) none of the above. 
A) frictionally unemployed. 
B) structurally unemployed. 
C) not unemployed. 
D) cyclically unemployed. 
E) none of the above.

Question 3

Which one of the following people would be counted as unemployed in Canada?

Accepted Answer

A) Veena is not working, but she is looking for a full-time job. 
B) Kathy has stopped looking for work since she was unable to find a suitable job during a one-month search. 
C) Sharon is a college student with a job. 
D) Christos has been laid off from his job a month ago, and has not been looking for a new job as he is waiting for a severance package from his former employer. 
E) Benoit who was laid off when his firm closed down 2 months ago and has not been looking for work as he is going back to school. 
A) Veena is not working, but she is looking for a full-time job. 
B) Kathy has stopped looking for work since she was unable to find a suitable job during a one-month search. 
C) Sharon is a college student with a job. 
D) Christos has been laid off from his job a month ago, and has not been looking for a new job as he is waiting for a severance package from his former employer. 
E) Benoit who was laid off when his firm closed down 2 months ago and has not been looking for work as he is going back to school.

Question 4

The commodity substitution bias is that

Accepted Answer

A) consumers substitute high-quality goods for low-quality goods. 
B) government spending is a good substitute for investment expenditures. 
C) national saving and foreign borrowing are interchangeable. 
D) consumers decrease the quantity they buy of goods whose relative prices rise and increase the quantity of goods whose relative price falls. 
E) consumers substitute more expensive goods for less expensive goods when technology advances. 
A) consumers substitute high-quality goods for low-quality goods. 
B) government spending is a good substitute for investment expenditures. 
C) national saving and foreign borrowing are interchangeable. 
D) consumers decrease the quantity they buy of goods whose relative prices rise and increase the quantity of goods whose relative price falls. 
E) consumers substitute more expensive goods for less expensive goods when technology advances.

Question 5

The fixed basket of Econoland consists of 10 units of A,20 units of B,and 30 units of C.Current prices are $1 per unit of A,$2 per unit of B,and $3 per unit of C.Base year prices are $1 for each unit of A,B,and C.What is the CPI in the current year?

Accepted Answer

A) 43 
B) 100 
C) 233 
D) 430 
E) 140 
A) 43 
B) 100 
C) 233 
D) 430 
E) 140

Question 6

In China,suppose that the price level was 100 in 2007,110 in 2008,120 in 2009,and 130 in 2011.Over this time period,

Accepted Answer

A) zero inflation occurred. 
B) the inflation rate increased. 
C) the inflation rate was positive. 
D) the inflation rate decreased. 
E) Both C and D are correct. 
A) zero inflation occurred. 
B) the inflation rate increased. 
C) the inflation rate was positive. 
D) the inflation rate decreased. 
E) Both C and D are correct.

Question 7

If the inflation rate is positive,the price level in an economy is

Accepted Answer

A) falling rapidly. 
B) rising. 
C) constant. 
D) falling slowly. 
E) zero. 
A) falling rapidly. 
B) rising. 
C) constant. 
D) falling slowly. 
E) zero.

Question 8

In a country with a working-age population of 30 million,18 million are employed,2 million are unemployed,and 2 million of the employed are working part-time,half of whom wish to work full-time.The employment-to-population ratio is

Accepted Answer

A) 73.3 percent. 
B) 66.7 percent. 
C) 60 percent. 
D) 53.3 percent. 
E) none of the above. 
A) 73.3 percent. 
B) 66.7 percent. 
C) 60 percent. 
D) 53.3 percent. 
E) none of the above.

Question 9

Suppose the country of Tiny Town experiences frictional unemployment.This frictional unemployment would

Accepted Answer

A) signal that the country is in a recession. 
B) be considered a natural occurrence in a growing economy. 
C) signal the number of discouraged workers is growing. 
D) increase structural unemployment. 
E) decrease the output gap. 
A) signal that the country is in a recession. 
B) be considered a natural occurrence in a growing economy. 
C) signal the number of discouraged workers is growing. 
D) increase structural unemployment. 
E) decrease the output gap.

Question 10

Which one of the following people is structurally unemployed?

Accepted Answer

A) a Saskatchewan welder who lost her job when her company relocated to B.C.and is currently looking for a job 
B) a Nova Scotia fishery worker who is searching for a better job closer to home 
C) a steel worker who is laid off but who expects to be called back soon 
D) an office worker who has lost her job because of a general slowdown in economic activity 
E) none of the above 
A) a Saskatchewan welder who lost her job when her company relocated to B.C.and is currently looking for a job 
B) a Nova Scotia fishery worker who is searching for a better job closer to home 
C) a steel worker who is laid off but who expects to be called back soon 
D) an office worker who has lost her job because of a general slowdown in economic activity 
E) none of the above

Question 11

The Consumer Price Index measures inflation by using

Accepted Answer

A) all goods and services that are produced using a current-year basket. 
B) all goods and services that are produced using a base-year basket. 
C) only consumption goods and services purchased using a current-year basket. 
D) only consumption goods and services purchased using a base-year basket. 
E) A and D. 
A) all goods and services that are produced using a current-year basket. 
B) all goods and services that are produced using a base-year basket. 
C) only consumption goods and services purchased using a current-year basket. 
D) only consumption goods and services purchased using a base-year basket. 
E) A and D.

Question 12

Use the table below to answer the following questions.
Table 21.2.1
This table shows the answers given by interviewees to the Labour Force Survey
  
-In Table 21.2.1,which person is structurally unemployed?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) none of them 
A) A 
B) B 
C) C 
D) D 
E) none of them

Question 13

Suppose the working-age population in Tiny Town is 100 people.If 25 of these people are not in the labour force,the ________ equals ________.

Accepted Answer

A) labour force;75 people 
B) unemployment rate;25 percent 
C) unemployment rate;33 percent 
D) employment-to-population ratio;25 percent 
E) employment-to-population ratio;75 percent 
A) labour force;75 people 
B) unemployment rate;25 percent 
C) unemployment rate;33 percent 
D) employment-to-population ratio;25 percent 
E) employment-to-population ratio;75 percent

Question 14

Table 21.3.3
  
-Refer to Table 21.3.3.The IMF World Economic Outlook reports the price level data given in the table.The region with the highest inflation rate in 2007 is ________.The region with the highest inflation rate in 2008 is ________.

Accepted Answer

A) the Euro area;the United States 
B) Japan;the United States 
C) the Euro area;Japan 
D) the United States;Japan 
E) the United States;the Euro area 
A) the Euro area;the United States 
B) Japan;the United States 
C) the Euro area;Japan 
D) the United States;Japan 
E) the United States;the Euro area

Question 15

Suppose a trade union and a firm agree to increase the wage rate by the same percentage as the increase in the Consumer Price Index.If the CPI increases by 5 percent,then the real income of workers will

Accepted Answer

A) increase by 5 percent as well. 
B) remain unchanged, accounting for bias in the calculation of the CPI. 
C) decrease by 5 percent, accounting for bias in the calculation of the CPI. 
D) increase by more than 5 percent, accounting for bias in the calculation of the CPI. 
E) increase by less than 5 percent, accounting for bias in the calculation of the CPI. 
A) increase by 5 percent as well. 
B) remain unchanged, accounting for bias in the calculation of the CPI. 
C) decrease by 5 percent, accounting for bias in the calculation of the CPI. 
D) increase by more than 5 percent, accounting for bias in the calculation of the CPI. 
E) increase by less than 5 percent, accounting for bias in the calculation of the CPI.

Question 16

Use the table below to answer the following questions.
Table 21.3.1
Suppose a simple economy produces three goods only.
The price and output data for some selected years are shown below.
  
-Refer to Table 21.3.1.The reference base period is 2002.The CPI in 2012 is

Accepted Answer

A) 1,340. 
B) 158. 
C) 100. 
D) 96. 
E) 63. 
A) 1,340. 
B) 158. 
C) 100. 
D) 96. 
E) 63.

Question 17

In a country with a working-age population of 22 million,16 million are employed,2 million are unemployed,and 1 million of the employed are working part-time,half of whom wish to work full-time.The unemployment rate is

Accepted Answer

A) 10 percent. 
B) 10.3 percent. 
C) 11.1 percent. 
D) 15.4 percent. 
E) none of the above. 
A) 10 percent. 
B) 10.3 percent. 
C) 11.1 percent. 
D) 15.4 percent. 
E) none of the above.

Question 18

In a country with a working-age population of 30 million,18 million are employed,2 million are unemployed,and 2 million of the employed are working part-time,half of whom wish to work full-time.The unemployment rate is

Accepted Answer

A) 10 percent. 
B) 9.1 percent. 
C) 14.3 percent. 
D) 11.1 percent. 
E) none of the above. 
A) 10 percent. 
B) 9.1 percent. 
C) 14.3 percent. 
D) 11.1 percent. 
E) none of the above.

Question 19

The three types of unemployment are

Accepted Answer

A) frictional, structural, and involuntary. 
B) voluntary, involuntary, and natural. 
C) voluntary, involuntary, and cyclical. 
D) frictional, structural, and cyclical. 
E) cyclical, maternity leave, and paternity leave. 
A) frictional, structural, and involuntary. 
B) voluntary, involuntary, and natural. 
C) voluntary, involuntary, and cyclical. 
D) frictional, structural, and cyclical. 
E) cyclical, maternity leave, and paternity leave.

Question 20

Between 1972 and 2012,Canada's inflation rate as measured by the CPI ________.

Accepted Answer

A) rises in some years and falls in some years 
B) consistently rises every year 
C) consistently falls every year 
D) was always between 1 and 3 percent a year 
E) was always positive 
A) rises in some years and falls in some years 
B) consistently rises every year 
C) consistently falls every year 
D) was always between 1 and 3 percent a year 
E) was always positive

Exam 21: Monitoring Jobs and Inflation

Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent.Then cyclical unemployment is

Henelyn lost her job as a factory worker when she was replaced by a robotic machine.Now she is looking for a new job.Henelyn is

Which one of the following people would be counted as unemployed in Canada?

The commodity substitution bias is that

The fixed basket of Econoland consists of 10 units of A,20 units of B,and 30 units of C.Current prices are $1 per unit of A,$2 per unit of B,and $3 per unit of C.Base year prices are $1 for each unit of A,B,and C.What is the CPI in the current year?

In China,suppose that the price level was 100 in 2007,110 in 2008,120 in 2009,and 130 in 2011.Over this time period,

If the inflation rate is positive,the price level in an economy is

In a country with a working-age population of 30 million,18 million are employed,2 million are unemployed,and 2 million of the employed are working part-time,half of whom wish to work full-time.The employment-to-population ratio is

Suppose the country of Tiny Town experiences frictional unemployment.This frictional unemployment would

Which one of the following people is structurally unemployed?

The Consumer Price Index measures inflation by using

Use the table below to answer the following questions. Table 21.2.1 This table shows the answers given by interviewees to the Labour Force Survey -In Table 21.2.1,which person is structurally unemployed?

Suppose the working-age population in Tiny Town is 100 people.If 25 of these people are not in the labour force,the ________ equals ________.

Table 21.3.3 -Refer to Table 21.3.3.The IMF World Economic Outlook reports the price level data given in the table.The region with the highest inflation rate in 2007 is ________.The region with the highest inflation rate in 2008 is ________.

Suppose a trade union and a firm agree to increase the wage rate by the same percentage as the increase in the Consumer Price Index.If the CPI increases by 5 percent,then the real income of workers will

Use the table below to answer the following questions. Table 21.3.1 Suppose a simple economy produces three goods only. The price and output data for some selected years are shown below. -Refer to Table 21.3.1.The reference base period is 2002.The CPI in 2012 is

In a country with a working-age population of 22 million,16 million are employed,2 million are unemployed,and 1 million of the employed are working part-time,half of whom wish to work full-time.The unemployment rate is

In a country with a working-age population of 30 million,18 million are employed,2 million are unemployed,and 2 million of the employed are working part-time,half of whom wish to work full-time.The unemployment rate is

The three types of unemployment are

Between 1972 and 2012,Canada's inflation rate as measured by the CPI ________.

What Is Economics?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring GDP and Economic Growth

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Suppose the working-age population in Tiny Town is 100 people.If 25 of these people are not in the labour force,the equals .

Table 21.3.3 -Refer to Table 21.3.3.The IMF World Economic Outlook reports the price level data given in the table.The region with the highest inflation rate in 2007 is .The region with the highest inflation rate in 2008 is .