Question 1

Jesse just graduated from university,and is looking for her first job.Jesse is

Accepted Answer

A) frictionally unemployed. 
B) structurally unemployed. 
C) not unemployed. 
D) cyclically unemployed. 
E) not in the labour force. 
A) frictionally unemployed. 
B) structurally unemployed. 
C) not unemployed. 
D) cyclically unemployed. 
E) not in the labour force.

Question 2

The cost of the CPI basket in base-period prices is $200 and the cost of the CPI basket in current-period prices is $450.The CPI in the current year is

Accepted Answer

A) 450. 
B) 225. 
C) 300. 
D) 250. 
E) 44.44. 
A) 450. 
B) 225. 
C) 300. 
D) 250. 
E) 44.44.

Question 3

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 cyclically unemployed?

Accepted Answer

A) A 
B) B 
C) C 
D) D and B 
E) A and C 
A) A 
B) B 
C) C 
D) D and B 
E) A and C

Question 4

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 employment-to-population ratio is

Accepted Answer

A) 72.7 percent. 
B) 65 percent. 
C) 75.5 percent. 
D) 57.5 percent. 
E) none of the above. 
A) 72.7 percent. 
B) 65 percent. 
C) 75.5 percent. 
D) 57.5 percent. 
E) none of the above.

Question 5

If prices at Wendy's rise,more consumers buy their meals at McDonald's and fewer consumers buy their meals at Wendy's.This is an example of

Accepted Answer

A) consumers' action to boycott Wendy's. 
B) outlet substitution. 
C) commodity substitution. 
D) both A and B. 
E) both B and C. 
A) consumers' action to boycott Wendy's. 
B) outlet substitution. 
C) commodity substitution. 
D) both A and B. 
E) both B and C.

Question 6

If the CPI was 228 at the end of 2011 and 236 at the end of 2012,what was the inflation rate in 2012?

Accepted Answer

A) 8 percent 
B) 236 percent 
C) 3.5 percent 
D) 3.4 percent 
E) 4 percent 
A) 8 percent 
B) 236 percent 
C) 3.5 percent 
D) 3.4 percent 
E) 4 percent

Question 7

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 labour force participation rate 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 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 labour force is

Accepted Answer

A) 30 million. 
B) 18 million. 
C) 20 million. 
D) 22 million. 
E) 16 million. 
A) 30 million. 
B) 18 million. 
C) 20 million. 
D) 22 million. 
E) 16 million.

Question 9

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.If 500,000 of those unemployed are cyclically unemployed,what is the natural unemployment rate?

Accepted Answer

A) 11.1 percent 
B) 5.6 percent 
C) 8.3 percent 
D) 9.4 percent 
E) none of the above 
A) 11.1 percent 
B) 5.6 percent 
C) 8.3 percent 
D) 9.4 percent 
E) none of the above

Question 10

In a country with a working-age population of 20 million,13 million are employed,1.5 million are unemployed,and 1 million of the employed are working part-time,half of whom wish to work full-time.The size of the labour force is

Accepted Answer

A) 20 million. 
B) 15.5 million. 
C) 14.5 million. 
D) 13 million. 
E) 11.5 million. 
A) 20 million. 
B) 15.5 million. 
C) 14.5 million. 
D) 13 million. 
E) 11.5 million.

Question 11

Suppose the economy is experiencing frictional unemployment of 1 percent,structural unemployment of 3 percent and cyclical unemployment of 4 percent.What is the natural unemployment rate?

Accepted Answer

A) 3 percent 
B) 4 percent 
C) 5 percent 
D) 7 percent 
E) 8 percent 
A) 3 percent 
B) 4 percent 
C) 5 percent 
D) 7 percent 
E) 8 percent

Question 12

Hyperinflation is defined as

Accepted Answer

A) declining inflation rates. 
B) rising but low inflation rates. 
C) very high inflation rates. 
D) very low inflation rates. 
E) an increase in the price level. 
A) declining inflation rates. 
B) rising but low inflation rates. 
C) very high inflation rates. 
D) very low inflation rates. 
E) an increase in the price level.

Question 13

The unemployment rate is supposed to measure ________.It is an imperfect measure because ________.

Accepted Answer

A) the number of unemployed plus the number of marginally attached workers expressed as a percentage of the labour force;it excludes the marginally attached workers because Statistics Canada considers them as employed 
B) the percentage of the working-age population who are unemployed;it is impossible to count everyone in the working-age population 
C) the percentage of the labour force who are unemployed;it is impossible to count everyone in the labour force 
D) the underutilization of labour resources;it excludes some underutilized labour and some unemployment is unavoidable 
E) the underutilization of labour resources;it includes part-time workers and excludes discouraged workers 
A) the number of unemployed plus the number of marginally attached workers expressed as a percentage of the labour force;it excludes the marginally attached workers because Statistics Canada considers them as employed 
B) the percentage of the working-age population who are unemployed;it is impossible to count everyone in the working-age population 
C) the percentage of the labour force who are unemployed;it is impossible to count everyone in the labour force 
D) the underutilization of labour resources;it excludes some underutilized labour and some unemployment is unavoidable 
E) the underutilization of labour resources;it includes part-time workers and excludes discouraged workers

Question 14

Counting involuntary part-time workers as unemployed would

Accepted Answer

A) not change the actual unemployment rate. 
B) lower the measured unemployment rate. 
C) raise the natural unemployment rate. 
D) raise the full employment rate. 
E) raise the measured unemployment rate. 
A) not change the actual unemployment rate. 
B) lower the measured unemployment rate. 
C) raise the natural unemployment rate. 
D) raise the full employment rate. 
E) raise the measured unemployment rate.

Question 15

Some unemployment is unavoidable because ________.

Accepted Answer

A) people are making transitions through the stages of life and businesses are making transitions 
B) many part-time workers would like to have full-time work 
C) often people become discouraged workers 
D) many people in the working-age population attend school and are unemployed 
E) there is always some cyclical unemployment 
A) people are making transitions through the stages of life and businesses are making transitions 
B) many part-time workers would like to have full-time work 
C) often people become discouraged workers 
D) many people in the working-age population attend school and are unemployed 
E) there is always some cyclical unemployment

Question 16

Commodity substitution bias in the CPI refers to the fact that the CPI

Accepted Answer

A) takes into account the substitution of goods by consumers when relative prices change. 
B) takes no account of the substitution of goods by consumers when relative prices change. 
C) substitutes quality changes whenever they occur without taking account of the cost of the quality changes. 
D) substitutes relative prices for absolute prices of goods. 
E) accounts for improved quality in price rises. 
A) takes into account the substitution of goods by consumers when relative prices change. 
B) takes no account of the substitution of goods by consumers when relative prices change. 
C) substitutes quality changes whenever they occur without taking account of the cost of the quality changes. 
D) substitutes relative prices for absolute prices of goods. 
E) accounts for improved quality in price rises.

Question 17

When the unemployment rate is less than the natural unemployment rate,real GDP is ________ than potential GDP and the output gap is ________.

Accepted Answer

A) greater;positive 
B) smaller;positive 
C) greater;negative 
D) smaller;negative 
E) greater;equal to zero 
A) greater;positive 
B) smaller;positive 
C) greater;negative 
D) smaller;negative 
E) greater;equal to zero

Question 18

If the CPI in 2008 was 100 and the CPI in 2006 was 115,then the inflation rate in 2006 is

Accepted Answer

A) 1.5 percent. 
B) 100 percent. 
C) 11.5 percent. 
D) 115 percent. 
E) none of the above. 
A) 1.5 percent. 
B) 100 percent. 
C) 11.5 percent. 
D) 115 percent. 
E) none of the above.

Question 19

Complete the following sentence.Full employment

Accepted Answer

A) occurs when all unemployment is cyclical and structural. 
B) occurs when all unemployment is frictional and discouraged. 
C) occurs when there is zero unemployment. 
D) occurs when there is zero frictional unemployment. 
E) occurs when there is zero cyclical unemployment. 
A) occurs when all unemployment is cyclical and structural. 
B) occurs when all unemployment is frictional and discouraged. 
C) occurs when there is zero unemployment. 
D) occurs when there is zero frictional unemployment. 
E) occurs when there is zero cyclical unemployment.

Question 20

The inflation rate measures

Accepted Answer

A) the annual change in the price level. 
B) the annual percentage change in the price level. 
C) the average price level. 
D) the annual percentage change in the wage rate. 
E) none of the above. 
A) the annual change in the price level. 
B) the annual percentage change in the price level. 
C) the average price level. 
D) the annual percentage change in the wage rate. 
E) none of the above.

Exam 21: Monitoring Jobs and Inflation

Jesse just graduated from university,and is looking for her first job.Jesse is

The cost of the CPI basket in base-period prices is $200 and the cost of the CPI basket in current-period prices is $450.The CPI in the current year is

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 cyclically unemployed?

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 employment-to-population ratio is

If prices at Wendy's rise,more consumers buy their meals at McDonald's and fewer consumers buy their meals at Wendy's.This is an example of

If the CPI was 228 at the end of 2011 and 236 at the end of 2012,what was the inflation rate in 2012?

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 labour force participation 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 labour force 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.If 500,000 of those unemployed are cyclically unemployed,what is the natural unemployment rate?

In a country with a working-age population of 20 million,13 million are employed,1.5 million are unemployed,and 1 million of the employed are working part-time,half of whom wish to work full-time.The size of the labour force is

Suppose the economy is experiencing frictional unemployment of 1 percent,structural unemployment of 3 percent and cyclical unemployment of 4 percent.What is the natural unemployment rate?

Hyperinflation is defined as

The unemployment rate is supposed to measure ________.It is an imperfect measure because ________.

Counting involuntary part-time workers as unemployed would

Some unemployment is unavoidable because ________.

Commodity substitution bias in the CPI refers to the fact that the CPI

When the unemployment rate is less than the natural unemployment rate,real GDP is ________ than potential GDP and the output gap is ________.

If the CPI in 2008 was 100 and the CPI in 2006 was 115,then the inflation rate in 2006 is

Complete the following sentence.Full employment

The inflation rate measures

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The unemployment rate is supposed to measure .It is an imperfect measure because .

When the unemployment rate is less than the natural unemployment rate,real GDP is than potential GDP and the output gap is .