Question 1

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

Accepted Answer

A) 0.1 to 0.2 
B) 0.2 to 2.0 
C) 0.4 
D) 0.5 to 1.0 
E) 1.0 to 3.0 
A) 0.1 to 0.2 
B) 0.2 to 2.0 
C) 0.4 
D) 0.5 to 1.0 
E) 1.0 to 3.0

Question 2

The recession that followed the global financial crisis of 2007-2009 caused ________ in Canada.

Accepted Answer

A) less unemployment 
B) a rise in the labour force participation rate 
C) an increase in the duration a typical unemployed person was out of work 
D) less government spending 
E) a drop in the working age population 
A) less unemployment 
B) a rise in the labour force participation rate 
C) an increase in the duration a typical unemployed person was out of work 
D) less government spending 
E) a drop in the working age population

Question 3

Cashmere socks cost 35 cents a pair in 1915. Cashmere socks now cost about $40 a pair. This means that cashmere socks are much less affordable now than in 1915.

Accepted Answer

A) True 
 B)False

Question 4

If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level, we would base our measure of inflation on

Accepted Answer

A) the producer price index. 
B) the consumer price index. 
C) the GDP deflator. 
D) the household price index. 
E) the Baltic dry index. 
A) the producer price index. 
B) the consumer price index. 
C) the GDP deflator. 
D) the household price index. 
E) the Baltic dry index.

Question 5

In December 2015, CHCH TV laid-off 129 employees from its local news division. If these lay-offs occured because advertisers cut back their spending due to a slow down in the economy, the former local news division workers would be classed as

Accepted Answer

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

Question 6

The costs to firms of changing prices are called

Accepted Answer

A) redistribution costs. 
B) menu costs. 
C) anticipation costs. 
D) money illusion costs. 
E) an inflation tax. 
A) redistribution costs. 
B) menu costs. 
C) anticipation costs. 
D) money illusion costs. 
E) an inflation tax.

Question 7

Monthly expenditures for a family of 4 in 2010 averaged $1,400.In 2011, the cost of the same purchases was $1,500.If 2010 is the base year, what was the CPI in 2011?

Accepted Answer

A) 110 
B) 107 
C) 100 
D) 93 
E) 85 
A) 110 
B) 107 
C) 100 
D) 93 
E) 85

Question 8

Discuss the likely impact of each of the following on the unemployment rate.
a.The length of time workers are eligible to receive Employment Insurance payments is cut in half.
b.The government passes a law making labour unions illegal.
c.The minimum wage is raised by 50 percent.
d.The government funds an Internet site where companies can post job openings at no charge.

Accepted Answer

a.The unemployment rate will likely decr

Question 9

Explain what economists mean by full employment and why this rate of unemployment is not zero.

Accepted Answer

Full employment occurs in the macro econ

Question 10

Except for recessions, the duration of unemployment for the typical person lasts

Accepted Answer

A) less than 4 weeks. 
B) less than 13 weeks. 
C) 14 to 25 weeks. 
D) more than 25 weeks. 
E) over five years. 
A) less than 4 weeks. 
B) less than 13 weeks. 
C) 14 to 25 weeks. 
D) more than 25 weeks. 
E) over five years.

Question 11

Labour unions cause unemployment because the union contract wage is set

Accepted Answer

A) below the market wage, causing a shortage of labour. 
B) below the market wage, causing a surplus of labour. 
C) above the market wage, causing a surplus of labour. 
D) above the market wage, causing a shortage of labour. 
E) equal to the market clearing wage. 
A) below the market wage, causing a shortage of labour. 
B) below the market wage, causing a surplus of labour. 
C) above the market wage, causing a surplus of labour. 
D) above the market wage, causing a shortage of labour. 
E) equal to the market clearing wage.

Question 12

If inflation increases unexpectedly, then

Accepted Answer

A) borrowers pay a higher real interest rate than they expected. 
B) lenders receive a lower real interest rate than they expected. 
C) lenders gain and borrowers gain. 
D) neither borrowers nor lenders lose. 
E) borrowers gain from a higher than expected real interest rate. 
A) borrowers pay a higher real interest rate than they expected. 
B) lenders receive a lower real interest rate than they expected. 
C) lenders gain and borrowers gain. 
D) neither borrowers nor lenders lose. 
E) borrowers gain from a higher than expected real interest rate.

Question 13

List three different price indices and explain how they differ in terms of the market basket on which they are based.

Accepted Answer

Three examples of price indices are the

Question 14

If cyclical unemployment is eliminated in the economy, then

Accepted Answer

A) the economy is considered to be at full employment. 
B) the unemployment rate is below the natural rate of unemployment. 
C) the unemployment rate is above the natural rate of unemployment. 
D) the economy is at less than full employment. 
E) the unemployment rate will be zero. 
A) the economy is considered to be at full employment. 
B) the unemployment rate is below the natural rate of unemployment. 
C) the unemployment rate is above the natural rate of unemployment. 
D) the economy is at less than full employment. 
E) the unemployment rate will be zero.

Question 15

How could a growing labour force lead to an increase in the unemployment rate?

Accepted Answer

The labour force is calculated as the su

Question 16

If the CPI falls from 142 to 140 between two consecutive years, this implies that prices fell by 2% between those two years.

Accepted Answer

A) True 
 B)False

Question 17

The costs to firms of changing prices are called menu costs.

Accepted Answer

A) True 
 B)False

Question 18

Throughout 2016 Alberta's oil and gas sector laid-off thousands of workers due to low oil prices. If oil prices do not recover these unemployed workers would classed as

Accepted Answer

A) structurally unemployed. 
B) seasonally unemployed. 
C) frictionally unemployed. 
D) cyclically unemployed. 
E) naturally unemployed. 
A) structurally unemployed. 
B) seasonally unemployed. 
C) frictionally unemployed. 
D) cyclically unemployed. 
E) naturally unemployed.

Question 19

The labour force equals the number of people

Accepted Answer

A) employed. 
B) unemployed. 
C) employed plus unemployed. 
D) in the working-age population. 
E) in the entire country. 
A) employed. 
B) unemployed. 
C) employed plus unemployed. 
D) in the working-age population. 
E) in the entire country.

Question 20

Which of the following is an example of a worker experiencing frictional unemployment?

Accepted Answer

A) a worker who quits his job at the post office to find more interesting work 
B) a computer programmer who loses her job because it is outsourced to India 
C) an employee who is laid off because the economy is suffering a recession 
D) an Air Canada pilot who loses her job because of lack of demand for air travel 
E) a road worker laid off in the winter 
A) a worker who quits his job at the post office to find more interesting work 
B) a computer programmer who loses her job because it is outsourced to India 
C) an employee who is laid off because the economy is suffering a recession 
D) an Air Canada pilot who loses her job because of lack of demand for air travel 
E) a road worker laid off in the winter

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

The recession that followed the global financial crisis of 2007-2009 caused ________ in Canada.

Cashmere socks cost 35 cents a pair in 1915. Cashmere socks now cost about $40 a pair. This means that cashmere socks are much less affordable now than in 1915.

If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level, we would base our measure of inflation on

In December 2015, CHCH TV laid-off 129 employees from its local news division. If these lay-offs occured because advertisers cut back their spending due to a slow down in the economy, the former local news division workers would be classed as

The costs to firms of changing prices are called

Monthly expenditures for a family of 4 in 2010 averaged $1,400.In 2011, the cost of the same purchases was $1,500.If 2010 is the base year, what was the CPI in 2011?

Explain what economists mean by full employment and why this rate of unemployment is not zero.

Except for recessions, the duration of unemployment for the typical person lasts

Labour unions cause unemployment because the union contract wage is set

If inflation increases unexpectedly, then

List three different price indices and explain how they differ in terms of the market basket on which they are based.

If cyclical unemployment is eliminated in the economy, then

How could a growing labour force lead to an increase in the unemployment rate?

If the CPI falls from 142 to 140 between two consecutive years, this implies that prices fell by 2% between those two years.

The costs to firms of changing prices are called menu costs.

Throughout 2016 Alberta's oil and gas sector laid-off thousands of workers due to low oil prices. If oil prices do not recover these unemployed workers would classed as

The labour force equals the number of people

Which of the following is an example of a worker experiencing frictional unemployment?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

GDP: Measuring Total Production and Income

Economic Growth, The Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 5: Unemployment and Inflation

Most economists believe that biases cause changes in the CPI to overstate the inflation rate by ________ percentage points.

The recession that followed the global financial crisis of 2007-2009 caused ________ in Canada.

Cashmere socks cost 35 cents a pair in 1915. Cashmere socks now cost about $40 a pair. This means that cashmere socks are much less affordable now than in 1915.

If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level, we would base our measure of inflation on

In December 2015, CHCH TV laid-off 129 employees from its local news division. If these lay-offs occured because advertisers cut back their spending due to a slow down in the economy, the former local news division workers would be classed as

The costs to firms of changing prices are called

Monthly expenditures for a family of 4 in 2010 averaged $1,400.In 2011, the cost of the same purchases was $1,500.If 2010 is the base year, what was the CPI in 2011?

Explain what economists mean by full employment and why this rate of unemployment is not zero.

Except for recessions, the duration of unemployment for the typical person lasts

Labour unions cause unemployment because the union contract wage is set

If inflation increases unexpectedly, then

List three different price indices and explain how they differ in terms of the market basket on which they are based.

If cyclical unemployment is eliminated in the economy, then

How could a growing labour force lead to an increase in the unemployment rate?

If the CPI falls from 142 to 140 between two consecutive years, this implies that prices fell by 2% between those two years.

The costs to firms of changing prices are called menu costs.

Throughout 2016 Alberta's oil and gas sector laid-off thousands of workers due to low oil prices. If oil prices do not recover these unemployed workers would classed as

The labour force equals the number of people

Which of the following is an example of a worker experiencing frictional unemployment?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

GDP: Measuring Total Production and Income

Economic Growth, The Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters