Exam 5: Unemployment and Inflation

In September 2016, the government of Alberta announced that it would raise the minimum in the province from $11.20 an hour to $15 an hour in 2018. Which of the following is most likely to occur as a result of the new minimum wage?

Some of the people advocating large increases in the minimum wage, use the theory of efficiency wages to counter the claim that large increases in the minimum wage increase unemployment. a.What are efficiency wages? b.What is likely to happen if the minimum wage were set equal to the efficiency wage? Explain.

Statistics Canada does not count discouraged workers as unemployed.Suppose discouraged workers were counted as unemployed.Explain how the unemployment rate and the labour force participation rate would change.

If inflation is completely anticipated,

Statistics Canada would categorize a person as ________ if they were temporarily away from their job because they were ill.

The inflation rate measures the average prices of goods and services in the economy.

Efficiency wage is another name for the minimum wage.

Figure 5.1 Alt text for Figure 5.1: In figure 5.1, a graph of the labour market. Long description for Figure 5.1: The x-axis is labelled, labour (millions of workers).The y-axis is labelled, wage (dollars per hour), ranging from 0 to 28 in increments of 2.2 intersecting lines are shown.A line slopes down from the top left of the quadrant, near the value 24 on the y-axis, to the bottom right corner, near the end of the x-axis.A second line slopes up from the bottom left corner of the quadrant, near the origin, to the top right corner.4 points plotted along the 2 sloping lines, and the point of intersection of the 2 lines, are connected to the corresponding values on the x-axis, and to the values 10, 13 and 16 on the y-axis. -Refer to Figure 5.1.Based on the graph of the labour market above, if a minimum wage of $16 per hour is imposed, which of the following will result?

Table 5.8 -Refer to Table 5.8.Suppose that the data in the table above reflect price levels in the economy.What is the inflation rate between 2013 and 2014?

What is the difference between the nominal interest rate and the real interest rate?

Suppose that in 2019, all prices in the economy double and that all wages and salaries have also doubled.In 2019 you

Shelter is the largest component of the Canadian CPI market basket.

The labour force survey is compiled from firms who answer questions about the number of persons who are employed and on the company payroll.

If you want to earn a real interest rate of 3% on money you lend, and you expect that inflation will be 2%, what nominal rate of interest will you charge?

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 real average hourly earnings for 1956 in 2015 dollars equal

Table 5.6 -Refer to Table 5.6.Consider the above values of the consumer price index for 2015, 2016, and 2017.The inflation rate for 2016 was equal to

Which of the following would reduce the labour force participation rate, all else equal?

When the actual inflation rate turns out to be greater than the expected inflation rate, who gains - the borrower or the lender - and who loses? Explain why.

Despite increasing the unemployment rate, the Employment Insurance program can improve the economy by

When actual inflation is less than expected inflation,