Question 1

The full-employment rate of unemployment is zero.

Accepted Answer

A) True 
 B)False

Question 2

There are no costs to inflation if it is fully anticipated.

Accepted Answer

A) True 
 B)False

Question 3

In November 2015 the Purchasing Managers' Index for Canadian manufacturers was 48.6 which predicts a(n)________ in the number of persons it employed and a(n)________ in the total number of persons unemployed in the economy.

Accepted Answer

A) decrease; increase 
B) decrease; decrease 
C) increase; decrease 
D) increase; increase 
A) decrease; increase 
B) decrease; decrease 
C) increase; decrease 
D) increase; increase

Question 4

A lumberjack loses his job because timber cutting restrictions were imposed by the Environment Canada to protect the spotted owl habitat.This lumberjack would be

Accepted Answer

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

Question 5

Inflation redistributes income to a greater extent when the inflation is unanticipated compared to when the inflation is anticipated.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following explains why Canada tends to have unemployment rates that are higher than the United States?

Accepted Answer

A) Technological change occurs at a faster rate in Canada, so structural unemployment is higher in Canada. 
B) Canada offers more generous unemployment benefits than the United States. 
C) Firms in Canada offer employees higher wages and higher benefits than do firms in the United States. 
D) The minimum wage in Canada is lower than it is in the United States. 
E) Seasons play a bigger role in the Canadian economy than in the American economy. 
A) Technological change occurs at a faster rate in Canada, so structural unemployment is higher in Canada. 
B) Canada offers more generous unemployment benefits than the United States. 
C) Firms in Canada offer employees higher wages and higher benefits than do firms in the United States. 
D) The minimum wage in Canada is lower than it is in the United States. 
E) Seasons play a bigger role in the Canadian economy than in the American economy.

Question 7

Eliminating frictional unemployment would be good for the economy.

Accepted Answer

A) True 
 B)False

Question 8

In the modern Canadian economy, the typical unemployed person stays unemployed for

Accepted Answer

A) a relatively long time, over a year. 
B) a relatively short time, less than 13 weeks. 
C) a long time during expansions and short time during recessions. 
D) an amount of time that is hard to quantify. 
E) a moderately long time, more than 26 weeks. 
A) a relatively long time, over a year. 
B) a relatively short time, less than 13 weeks. 
C) a long time during expansions and short time during recessions. 
D) an amount of time that is hard to quantify. 
E) a moderately long time, more than 26 weeks.

Question 9

Which of the following price indices comes closest to measuring the cost of living of the typical household?

Accepted Answer

A) GDP deflator 
B) producer price index 
C) consumer price index 
D) household price index 
E) house price index 
A) GDP deflator 
B) producer price index 
C) consumer price index 
D) household price index 
E) house price index

Question 10

If the nominal interest rate is 6% and the inflation rate is 9%, then the real interest rate is

Accepted Answer

A) -3%. 
B) 3%. 
C) 6.67%. 
D) 15%. 
E)  25%. 
A) -3%. 
B) 3%. 
C) 6.67%. 
D) 15%. 
E)  25%.

Question 11

When the price of gasoline rises, some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behaviour is called

Accepted Answer

A) outlet bias. 
B) increase in quality bias. 
C) substitution bias. 
D) discrimination bias. 
E) new product bias. 
A) outlet bias. 
B) increase in quality bias. 
C) substitution bias. 
D) discrimination bias. 
E) new product bias.

Question 12

You earned $30,000 in 1995, and your salary rose to $80,000 in 2016.If the CPI rose from 82 to 202 between 1995 and 2016, which of the following is true?

Accepted Answer

A) There was deflation between 1995 and 2016. 
B) The purchasing power of your salary fell between 1995 and 2016. 
C) The purchasing power of your salary remained constant between 1995 and 2016. 
D) The purchasing power of your salary increased between 1995 and 2016. 
E) There is no way to compare the purchasing power of your salary between 1995 and 2016. 
A) There was deflation between 1995 and 2016. 
B) The purchasing power of your salary fell between 1995 and 2016. 
C) The purchasing power of your salary remained constant between 1995 and 2016. 
D) The purchasing power of your salary increased between 1995 and 2016. 
E) There is no way to compare the purchasing power of your salary between 1995 and 2016.

Question 13

In November 2015, Canada saw an increase of ________ jobs for the same time the previous year.

Accepted Answer

A) 183,000 
B) 124,000 
C) 21,500 
D) 3.1 percent 
E) 5.1 percent 
A) 183,000 
B) 124,000 
C) 21,500 
D) 3.1 percent 
E) 5.1 percent

Question 14

In 2010, after the 2008-2009 recession, the most common length of time for a person to be unemployed was

Accepted Answer

A) less than 4 weeks. 
B) 5 to 13 weeks. 
C) 14 to 25 weeks. 
D) 26 weeks to 42 weeks. 
E) 42 weeks or more. 
A) less than 4 weeks. 
B) 5 to 13 weeks. 
C) 14 to 25 weeks. 
D) 26 weeks to 42 weeks. 
E) 42 weeks or more.

Question 15

The average price of goods and services in the economy is also known as

Accepted Answer

A) the price level. 
B) the inflation rate. 
C) a market basket. 
D) the cost of living. 
E) average expenditure. 
A) the price level. 
B) the inflation rate. 
C) a market basket. 
D) the cost of living. 
E) average expenditure.

Question 16

How would the unemployment rate and the labour force participation rate change if discouraged workers were counted as unemployed rather than as out of the labour force? Illustrate this using the formulae for both measurements.

Accepted Answer

The unemployment rate is calculated as:

Question 17

Which of the following do not suffer the costs of inflation?

Accepted Answer

A) persons on fixed incomes 
B) persons whose incomes rise more rapidly than inflation 
C) firms that have to devote more time and labour to raising prices 
D) investors who have to pay higher taxes because of the inflation 
E) lenders who did not forecast inflation accurately 
A) persons on fixed incomes 
B) persons whose incomes rise more rapidly than inflation 
C) firms that have to devote more time and labour to raising prices 
D) investors who have to pay higher taxes because of the inflation 
E) lenders who did not forecast inflation accurately

Question 18

A full-time student who is not working is categorized as

Accepted Answer

A) unemployed. 
B) employed. 
C) not in the labour force. 
D) a discouraged worker. 
E) frictionally unemployed. 
A) unemployed. 
B) employed. 
C) not in the labour force. 
D) a discouraged worker. 
E) frictionally unemployed.

Question 19

Table 5.14   The table above reports the nominal average hourly wage and the consumer price index for 1956 and 2012.
-Refer to Table 5.14.The percentage change in real average wage from 1956 to 2015 equals

Accepted Answer

A) 2.0 percent. 
B) 8.7 percent. 
C) 21.7 percent. 
D) 84.6 percent. 
E) 154.3 percent. 
A) 2.0 percent. 
B) 8.7 percent. 
C) 21.7 percent. 
D) 84.6 percent. 
E) 154.3 percent.

Question 20

Currently, the base year for the CPI is 2002.

Accepted Answer

A) True 
 B)False

The full-employment rate of unemployment is zero.

There are no costs to inflation if it is fully anticipated.

In November 2015 the Purchasing Managers' Index for Canadian manufacturers was 48.6 which predicts a(n) in the number of persons it employed and a(n) in the total number of persons unemployed in the economy.

A lumberjack loses his job because timber cutting restrictions were imposed by the Environment Canada to protect the spotted owl habitat.This lumberjack would be

Inflation redistributes income to a greater extent when the inflation is unanticipated compared to when the inflation is anticipated.

Which of the following explains why Canada tends to have unemployment rates that are higher than the United States?

Eliminating frictional unemployment would be good for the economy.

In the modern Canadian economy, the typical unemployed person stays unemployed for

Which of the following price indices comes closest to measuring the cost of living of the typical household?

If the nominal interest rate is 6% and the inflation rate is 9%, then the real interest rate is

When the price of gasoline rises, some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behaviour is called

You earned $30,000 in 1995, and your salary rose to $80,000 in 2016.If the CPI rose from 82 to 202 between 1995 and 2016, which of the following is true?

In November 2015, Canada saw an increase of ________ jobs for the same time the previous year.

In 2010, after the 2008-2009 recession, the most common length of time for a person to be unemployed was

The average price of goods and services in the economy is also known as

How would the unemployment rate and the labour force participation rate change if discouraged workers were counted as unemployed rather than as out of the labour force? Illustrate this using the formulae for both measurements.

Which of the following do not suffer the costs of inflation?

A full-time student who is not working is categorized as

Table 5.14 The table above reports the nominal average hourly wage and the consumer price index for 1956 and 2012. -Refer to Table 5.14.The percentage change in real average wage from 1956 to 2015 equals

Currently, the base year for the CPI is 2002.

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

The full-employment rate of unemployment is zero.

There are no costs to inflation if it is fully anticipated.

In November 2015 the Purchasing Managers' Index for Canadian manufacturers was 48.6 which predicts a(n)________ in the number of persons it employed and a(n)________ in the total number of persons unemployed in the economy.

A lumberjack loses his job because timber cutting restrictions were imposed by the Environment Canada to protect the spotted owl habitat.This lumberjack would be

Inflation redistributes income to a greater extent when the inflation is unanticipated compared to when the inflation is anticipated.

Which of the following explains why Canada tends to have unemployment rates that are higher than the United States?

Eliminating frictional unemployment would be good for the economy.

In the modern Canadian economy, the typical unemployed person stays unemployed for

Which of the following price indices comes closest to measuring the cost of living of the typical household?

If the nominal interest rate is 6% and the inflation rate is 9%, then the real interest rate is

When the price of gasoline rises, some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars.The fact that the CPI does not fully account for such changes in consumer behaviour is called

You earned $30,000 in 1995, and your salary rose to $80,000 in 2016.If the CPI rose from 82 to 202 between 1995 and 2016, which of the following is true?

In November 2015, Canada saw an increase of ________ jobs for the same time the previous year.

In 2010, after the 2008-2009 recession, the most common length of time for a person to be unemployed was

The average price of goods and services in the economy is also known as

How would the unemployment rate and the labour force participation rate change if discouraged workers were counted as unemployed rather than as out of the labour force? Illustrate this using the formulae for both measurements.

Which of the following do not suffer the costs of inflation?

A full-time student who is not working is categorized as

Table 5.14 The table above reports the nominal average hourly wage and the consumer price index for 1956 and 2012. -Refer to Table 5.14.The percentage change in real average wage from 1956 to 2015 equals

Currently, the base year for the CPI is 2002.

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

In November 2015 the Purchasing Managers' Index for Canadian manufacturers was 48.6 which predicts a(n) in the number of persons it employed and a(n) in the total number of persons unemployed in the economy.