Question 1

The increased generosity of unemployment insurance programs in Canada as compared to the United States should

Accepted Answer

A) decrease the duration of unemployment in Canada as compared to the United States. 
B) increase the duration of unemployment in Canada as compared to the United States. 
C) have no impact on the duration of unemployment in Canada. 
D) raise the duration of unemployment in the United States. 
E) raise Canada's structural unemployment relative to the United States. 
A) decrease the duration of unemployment in Canada as compared to the United States. 
B) increase the duration of unemployment in Canada as compared to the United States. 
C) have no impact on the duration of unemployment in Canada. 
D) raise the duration of unemployment in the United States. 
E) raise Canada's structural unemployment relative to the United States.

Question 2

The producer price index measures the prices that firms

Accepted Answer

A) pay for imported natural resources that go into the production process. 
B) receive for the goods and services they export. 
C) receive for the goods and services they use at all stages of production. 
D) pay for labour, whether or not the labour is foreign or domestic. 
E) pay the government in taxes and licencing fees. 
A) pay for imported natural resources that go into the production process. 
B) receive for the goods and services they export. 
C) receive for the goods and services they use at all stages of production. 
D) pay for labour, whether or not the labour is foreign or domestic. 
E) pay the government in taxes and licencing fees.

Question 3

Statistics Canada counts as employed people who work part-time, but would prefer to work full-time.Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as unemployed.Explain how the unemployment rate and the labour force participation rate would change.

Accepted Answer

The unemployment rate would increase and

Question 4

What is the natural rate of unemployment, and what types of unemployment constitute the natural rate of unemployment?

Accepted Answer

The natural rate of unemployment is the

Question 5

Table 5.9  
-Refer to Table 5.9.Suppose that the data in the table above reflect the price levels in the economy.What is the inflation rate in between 2002 and 2003?

Accepted Answer

A) 2% 
B) 5% 
C) 10% 
D) 12% 
E) 20% 
A) 2% 
B) 5% 
C) 10% 
D) 12% 
E) 20%

Question 6

Jack just received a promotion at work and now works 50 hours per week instead of 35.As a result,

Accepted Answer

A) the unemployment rate increased. 
B) the unemployment rate decreased. 
C) the labour force participation rate increased. 
D) the employment population ratio has increased. 
E) neither the unemployment rate nor the labour force participation rate changed. 
A) the unemployment rate increased. 
B) the unemployment rate decreased. 
C) the labour force participation rate increased. 
D) the employment population ratio has increased. 
E) neither the unemployment rate nor the labour force participation rate changed.

Question 7

A central concept in macroeconomics is the idea of the natural rate of unemployment.Why does it make sense to define full employment to occur when the unemployment rate equals the natural rate of unemployment, instead of when the unemployment rate equals zero? Elaborate and explain carefully.

Accepted Answer

With a growing, dynamic economy where bu

Question 8

The unemployment rate is

Accepted Answer

A) the percentage of the labour force that is employed. 
B) the percentage of the working-age population that is unemployed. 
C) the percentage of the labour force that is unemployed. 
D) the percentage of the working-age population that is employed. 
E) the percentage of the population that is unemployed. 
A) the percentage of the labour force that is employed. 
B) the percentage of the working-age population that is unemployed. 
C) the percentage of the labour force that is unemployed. 
D) the percentage of the working-age population that is employed. 
E) the percentage of the population that is unemployed.

Question 9

The labour force participation rate equals the

Accepted Answer

A) (number of employed divided by the labour force)× 100. 
B) (labour force divided by the number of people not in the labour force)× 100. 
C) (labour force divided by working-age population)× 100. 
D) (labour force divided by the total population)× 100. 
E) (working age population divided by employment)× 100. 
A) (number of employed divided by the labour force)× 100. 
B) (labour force divided by the number of people not in the labour force)× 100. 
C) (labour force divided by working-age population)× 100. 
D) (labour force divided by the total population)× 100. 
E) (working age population divided by employment)× 100.

Question 10

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.If inflation over the year is 2%, what is the real interest rate you are paying?

Accepted Answer

A) 2% 
B) 2.5% 
C) 3% 
D) 5% 
E) 7% 
A) 2% 
B) 2.5% 
C) 3% 
D) 5% 
E) 7%

Question 11

What are some reasons why many economists still think Employment Insurance (EI)is a good idea for Canada, despite the fact it prolongs job search and increases the unemployment rate?

Accepted Answer

If not for the EI program, unemployed wo

Question 12

If the minimum wage is set above the market wage,

Accepted Answer

A) the quantity of labour supplied will be below the quantity of labour demanded. 
B) unemployment will rise. 
C) highly-skilled workers will have a harder time finding jobs. 
D) frictional unemployment will increase. 
E) All of the above are correct. 
A) the quantity of labour supplied will be below the quantity of labour demanded. 
B) unemployment will rise. 
C) highly-skilled workers will have a harder time finding jobs. 
D) frictional unemployment will increase. 
E) All of the above are correct.

Question 13

Why might firms pay wages that are above the equilibrium wage in a market?

Accepted Answer

A) to increase the productivity of their workers 
B) to reduce the unemployment rate 
C) to encourage workers to form labour unions 
D) to reduce profit 
E) to avoid federal corporate income taxes 
A) to increase the productivity of their workers 
B) to reduce the unemployment rate 
C) to encourage workers to form labour unions 
D) to reduce profit 
E) to avoid federal corporate income taxes

Question 14

Except during recessions, workers in Canada are eligible for unemployment benefits for about twice as long a period of time as workers in the United States.As a result,

Accepted Answer

A) the average duration of unemployment is longer in the United States than in Canada. 
B) the unemployment rate in Canada is usually higher than in the United States. 
C) the opportunity cost of job search in Canada is lower than in the United States. 
D) frictional unemployment is higher, on average, in the United States than in Canada. 
E) cyclical unemployment is higher, on average in Canada than in the United States. 
A) the average duration of unemployment is longer in the United States than in Canada. 
B) the unemployment rate in Canada is usually higher than in the United States. 
C) the opportunity cost of job search in Canada is lower than in the United States. 
D) frictional unemployment is higher, on average, in the United States than in Canada. 
E) cyclical unemployment is higher, on average in Canada than in the United States.

Question 15

Suppose the working-age population of a fictional economy falls into the following categories: 90 are retired or homemakers; 60 have full-time employment; 20 have part-time employment; 20 do not have employment, but are actively looking for employment; and 10 would like employment but do not have employment and are not actively looking for employment.The official unemployment rate as calculated by Statistics Canada would equal

Accepted Answer

A) (20/60)× 100%. 
B) (20/80)× 100%. 
C) (30/80)× 100%. 
D) (20/100)× 100%. 
E) (60/90)× 100%. 
A) (20/60)× 100%. 
B) (20/80)× 100%. 
C) (30/80)× 100%. 
D) (20/100)× 100%. 
E) (60/90)× 100%.

Question 16

The CPI in 2014 was 125.2, while the CPI in 1991 was 82.8.If you had $5,000 in 1981, its equivalent purchasing power in 2014 would be $3306.71.

Accepted Answer

A) True 
 B)False

Question 17

What effect does the Employment Insurance program have on the unemployment rate?

Accepted Answer

The Employment Insurance program likely

Question 18

Unemployment caused by a business cycle recession is called cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 19

In 2016 the nominal interest rate paid by banks on savings deposits was 0.55 percent. At the same time the inflation rate was 1.5 percent. What was the real interest rate paid on savings?

Accepted Answer

A) -2.05 percent 
B) -1.05 percent 
C) 0)55 percent 
D) 2.05 percent 
E) 3.10 percent 
A) -2.05 percent 
B) -1.05 percent 
C) 0)55 percent 
D) 2.05 percent 
E) 3.10 percent

Question 20

The broadest measure of the price level that includes all final goods and services is

Accepted Answer

A) the producer price index. 
B) the consumer price index. 
C) the GDP deflator. 
D) the wholesale price index. 
E) house price index. 
A) the producer price index. 
B) the consumer price index. 
C) the GDP deflator. 
D) the wholesale price index. 
E) house price index.

The increased generosity of unemployment insurance programs in Canada as compared to the United States should

The producer price index measures the prices that firms

Statistics Canada counts as employed people who work part-time, but would prefer to work full-time.Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as unemployed.Explain how the unemployment rate and the labour force participation rate would change.

What is the natural rate of unemployment, and what types of unemployment constitute the natural rate of unemployment?

Table 5.9 -Refer to Table 5.9.Suppose that the data in the table above reflect the price levels in the economy.What is the inflation rate in between 2002 and 2003?

Jack just received a promotion at work and now works 50 hours per week instead of 35.As a result,

A central concept in macroeconomics is the idea of the natural rate of unemployment.Why does it make sense to define full employment to occur when the unemployment rate equals the natural rate of unemployment, instead of when the unemployment rate equals zero? Elaborate and explain carefully.

The unemployment rate is

The labour force participation rate equals the

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.If inflation over the year is 2%, what is the real interest rate you are paying?

What are some reasons why many economists still think Employment Insurance (EI)is a good idea for Canada, despite the fact it prolongs job search and increases the unemployment rate?

If the minimum wage is set above the market wage,

Why might firms pay wages that are above the equilibrium wage in a market?

Except during recessions, workers in Canada are eligible for unemployment benefits for about twice as long a period of time as workers in the United States.As a result,

The CPI in 2014 was 125.2, while the CPI in 1991 was 82.8.If you had $5,000 in 1981, its equivalent purchasing power in 2014 would be $3306.71.

What effect does the Employment Insurance program have on the unemployment rate?

Unemployment caused by a business cycle recession is called cyclical unemployment.

In 2016 the nominal interest rate paid by banks on savings deposits was 0.55 percent. At the same time the inflation rate was 1.5 percent. What was the real interest rate paid on savings?

The broadest measure of the price level that includes all final goods and services is

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

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Exam 5: Unemployment and Inflation

The increased generosity of unemployment insurance programs in Canada as compared to the United States should

The producer price index measures the prices that firms

Statistics Canada counts as employed people who work part-time, but would prefer to work full-time.Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as unemployed.Explain how the unemployment rate and the labour force participation rate would change.

What is the natural rate of unemployment, and what types of unemployment constitute the natural rate of unemployment?

Table 5.9 -Refer to Table 5.9.Suppose that the data in the table above reflect the price levels in the economy.What is the inflation rate in between 2002 and 2003?

Jack just received a promotion at work and now works 50 hours per week instead of 35.As a result,

A central concept in macroeconomics is the idea of the natural rate of unemployment.Why does it make sense to define full employment to occur when the unemployment rate equals the natural rate of unemployment, instead of when the unemployment rate equals zero? Elaborate and explain carefully.

The unemployment rate is

The labour force participation rate equals the

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.If inflation over the year is 2%, what is the real interest rate you are paying?

What are some reasons why many economists still think Employment Insurance (EI)is a good idea for Canada, despite the fact it prolongs job search and increases the unemployment rate?

If the minimum wage is set above the market wage,

Why might firms pay wages that are above the equilibrium wage in a market?

Except during recessions, workers in Canada are eligible for unemployment benefits for about twice as long a period of time as workers in the United States.As a result,

The CPI in 2014 was 125.2, while the CPI in 1991 was 82.8.If you had $5,000 in 1981, its equivalent purchasing power in 2014 would be $3306.71.

What effect does the Employment Insurance program have on the unemployment rate?

Unemployment caused by a business cycle recession is called cyclical unemployment.

In 2016 the nominal interest rate paid by banks on savings deposits was 0.55 percent. At the same time the inflation rate was 1.5 percent. What was the real interest rate paid on savings?

The broadest measure of the price level that includes all final goods and services is

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

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