Exam 5: Unemployment and Inflation

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

Which of the following explains the changes in the Canadian adult male labour force participation rate since 1976?

Your grandfather tells you that he earned $5,000/year in his first job in 1971.You earn $45,000/year in your first job in 2017.You know that average prices have risen steadily since 1961.You earn

Table 5.11 -Refer to Table 5.11.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2011 is the base year, then what is the CPI for 2016?

The consumer price index is the

Table 5.1 Consider the data above for a simple economy. -Refer to Table 5.1.The unemployment rate for this simple economy equals

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 2002 dollars equals

Suppose more Canadian retail firms decided to pay efficiency wages.As a result, we would expect

Statistics Canada would categorize a retiree who is not working as

Real interest rates at times have been negative.Why would anyone lending money agree to a negative real interest rate?

Statistics Canada surveys 16,758 Canadian households on their spending habits.The results are used to construct a typical basket of goods and services purchased by a typical household.Which of the following is not one of the broad categories of the basket?

If the federal government implements programs so that the unemployed are more quickly matched with jobs, then

Why would a firm pay efficiency wages?

Sarah is a full-time student who is not looking for work.What kind of unemployment is Sarah experiencing?

Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest.If the inflation rate was 7%, what was the real interest rate you paid?

Upon your graduation from university, you find that the economy is in recession and the unemployment rate is relatively high.Nonetheless, you continue along your career path looking for a new job because

Suppose your grandfather earned a salary of $12,000 in 1964.If the CPI is 31 in 1964 and 219 in 2017, then the value of your grandfather's salary in 2017 dollars is approximately

You lend $5,000 to a friend for one year at a nominal interest rate of 10%.Inflation during that year is 5%.As a result, you will receive ________ at the end of the year, but that money has a purchasing power of ________.

If the number of unemployed workers is 2 million and the number in the labour force is 28 million, what is the unemployment rate?

The percent increase in the CPI from one year to the next is a measure of the