Question 1

Which of the following causes the unemployment rate to understate the true extent of joblessness?

Accepted Answer

A) Many full-time workers really want to be part-time workers. 
B) Persons who collect unemployment benefits report themselves to be searching for a job. 
C) Discouraged workers are not counted as unemployed. 
D) A drug dealer reports herself as unemployed. 
E) Some people do not want to have a paid job. 
A) Many full-time workers really want to be part-time workers. 
B) Persons who collect unemployment benefits report themselves to be searching for a job. 
C) Discouraged workers are not counted as unemployed. 
D) A drug dealer reports herself as unemployed. 
E) Some people do not want to have a paid job.

Question 2

The most widely used measure of inflation is based on which of the following price indices?

Accepted Answer

A) the producer price index 
B) the consumer price index 
C) the GDP deflator 
D) the wholesale price index 
E) the S&P 500 index 
A) the producer price index 
B) the consumer price index 
C) the GDP deflator 
D) the wholesale price index 
E) the S&P 500 index

Question 3

Which of the following has a tendency to raise the unemployment rate?

Accepted Answer

A) implementing a minimum wage in an economy 
B) reducing unemployment insurance in an economy 
C) offering wages at the market-clearing rate 
D) reducing labour unions' membership in an economy 
E) introducing programs that retrain workers displaced by technological change 
A) implementing a minimum wage in an economy 
B) reducing unemployment insurance in an economy 
C) offering wages at the market-clearing rate 
D) reducing labour unions' membership in an economy 
E) introducing programs that retrain workers displaced by technological change

Question 4

The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation, but ________ quality increases.This causes the CPI to ________ the cost of the market basket.

Accepted Answer

A) also; understate 
B) also; overstate 
C) not; understate 
D) not; overstate 
A) also; understate 
B) also; overstate 
C) not; understate 
D) not; overstate

Question 5

The unemployment rate has historically been higher in Canada than in the United States.

Accepted Answer

A) True 
 B)False

Question 6

If firms pay what are called "efficiency wages," they pay wages that

Accepted Answer

A) motivate workers to increase their productivity. 
B) are lower than average to ensure maximum profit. 
C) will eventually lower the unemployment rate. 
D) are mandated by the government. 
E) negotiated by labour unions. 
A) motivate workers to increase their productivity. 
B) are lower than average to ensure maximum profit. 
C) will eventually lower the unemployment rate. 
D) are mandated by the government. 
E) negotiated by labour unions.

Question 7

The PPI is the

Accepted Answer

A) price parity index. 
B) prime producer index. 
C) producer price index. 
D) production performance indicator. 
E) partial prime interest rate. 
A) price parity index. 
B) prime producer index. 
C) producer price index. 
D) production performance indicator. 
E) partial prime interest rate.

Question 8

Which of the following describes actual trends in the Canadian labour force participation rate?

Accepted Answer

A) The labour force participation rate of adult men has risen since 1975. 
B) The labour force participation rate of adult women has fallen since 1975. 
C) The labour force participation rate of adult men not in school, but too young to retire has risen since 1975. 
D) The labour force participation rate of adult women has risen since 1975. 
E) The labour force participation rate of all adults has fallen since 1975. 
A) The labour force participation rate of adult men has risen since 1975. 
B) The labour force participation rate of adult women has fallen since 1975. 
C) The labour force participation rate of adult men not in school, but too young to retire has risen since 1975. 
D) The labour force participation rate of adult women has risen since 1975. 
E) The labour force participation rate of all adults has fallen since 1975.

Question 9

The real interest rate equals the nominal interest rate ________ the inflation rate.

Accepted Answer

A) times 
B) divided by 
C) plus 
D) minus 
E) to the power of 
A) times 
B) divided by 
C) plus 
D) minus 
E) to the power of

Question 10

Suppose 180,000 people are employed, 20,000 people are unemployed, and 50,000 people are out of the labour force.Calculate the labour force participation rate.

Accepted Answer

The labour force participation rate is c

Question 11

Which of the following is the smallest portion of the market basket of goods that makes up the CPI?

Accepted Answer

A) shelter 
B) food 
C) transportation 
D) alcohol and tobacco 
E) clothing 
A) shelter 
B) food 
C) transportation 
D) alcohol and tobacco 
E) clothing

Question 12

Table 5.12  
-Refer to Table 5.12.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 2015?

Accepted Answer

A) 40.08 
B) 100 
C) 180 
D) 208 
E) 251 
A) 40.08 
B) 100 
C) 180 
D) 208 
E) 251

Question 13

Cyclical unemployment is the result of

Accepted Answer

A) a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B) the search process of matching workers with jobs. 
C) the ups and downs in inflation. 
D) a slowdown in the economy. 
E) regional differences in the economy. 
A) a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs. 
B) the search process of matching workers with jobs. 
C) the ups and downs in inflation. 
D) a slowdown in the economy. 
E) regional differences in the economy.

Question 14

After the legalization of recreational marijuana, the labour force participation rate would

Accepted Answer

A) rise. 
B) fall. 
C) remain unchanged. 
D) rise then fall. 
E) fall then rise. 
A) rise. 
B) fall. 
C) remain unchanged. 
D) rise then fall. 
E) fall then rise.

Question 15

According to the text, economists consider full employment to occur when

Accepted Answer

A) everyone who wants a job has a job. 
B) frictional unemployment equals zero. 
C) the sum of frictional unemployment and structural unemployment equals zero. 
D) the unemployment rate consists of only frictional and structural unemployment. 
E) structural unemployment is less than 2 percent. 
A) everyone who wants a job has a job. 
B) frictional unemployment equals zero. 
C) the sum of frictional unemployment and structural unemployment equals zero. 
D) the unemployment rate consists of only frictional and structural unemployment. 
E) structural unemployment is less than 2 percent.

Question 16

Which of the following cause the unemployment rate as measured by Statistics Canada to understate the true extent of joblessness?

Accepted Answer

A) inflation 
B) discouraged workers 
C) people employed in the underground economy 
D) unemployed persons falsely report themselves to be actively looking for a job 
E) a shrinking working age population 
A) inflation 
B) discouraged workers 
C) people employed in the underground economy 
D) unemployed persons falsely report themselves to be actively looking for a job 
E) a shrinking working age population

Question 17

The nominal interest rate will be less than the real interest rate when

Accepted Answer

A) the rate of inflation is positive but decreasing. 
B) the rate of inflation is positive and increasing. 
C) the rate of inflation is negative. 
D) the real interest rate is negative. 
E) the rate of inflation is positive and constant. 
A) the rate of inflation is positive but decreasing. 
B) the rate of inflation is positive and increasing. 
C) the rate of inflation is negative. 
D) the real interest rate is negative. 
E) the rate of inflation is positive and constant.

Question 18

Full employment is not considered to be zero unemployment, because

Accepted Answer

A) some cyclical unemployment always exists. 
B) some people do not want a job. 
C) there are not enough jobs for everyone who wants one. 
D) people do not find jobs instantaneously. 
E) not everyone is entitled to work in Canada. 
A) some cyclical unemployment always exists. 
B) some people do not want a job. 
C) there are not enough jobs for everyone who wants one. 
D) people do not find jobs instantaneously. 
E) not everyone is entitled to work in Canada.

Question 19

Explain why you would rather be a borrower during a period of unexpected rising inflation, and a lender during a period of unexpected declining inflation.

Accepted Answer

The nominal interest rate includes a cha

Question 20

Table 5.19  
-Refer to Table 5.19.Looking at the table above, what is the rate of growth of real average hourly earnings from 2012 to 2013?

Accepted Answer

A) 1.2% 
B) 2% 
C) 4.3% 
D) -1% 
E) -1.8 % 
A) 1.2% 
B) 2% 
C) 4.3% 
D) -1% 
E) -1.8 %

Which of the following causes the unemployment rate to understate the true extent of joblessness?

The most widely used measure of inflation is based on which of the following price indices?

Which of the following has a tendency to raise the unemployment rate?

The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation, but quality increases.This causes the CPI to the cost of the market basket.

The unemployment rate has historically been higher in Canada than in the United States.

If firms pay what are called "efficiency wages," they pay wages that

The PPI is the

Which of the following describes actual trends in the Canadian labour force participation rate?

The real interest rate equals the nominal interest rate ________ the inflation rate.

Suppose 180,000 people are employed, 20,000 people are unemployed, and 50,000 people are out of the labour force.Calculate the labour force participation rate.

Which of the following is the smallest portion of the market basket of goods that makes up the CPI?

Table 5.12 -Refer to Table 5.12.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 2015?

Cyclical unemployment is the result of

After the legalization of recreational marijuana, the labour force participation rate would

According to the text, economists consider full employment to occur when

Which of the following cause the unemployment rate as measured by Statistics Canada to understate the true extent of joblessness?

The nominal interest rate will be less than the real interest rate when

Full employment is not considered to be zero unemployment, because

Explain why you would rather be a borrower during a period of unexpected rising inflation, and a lender during a period of unexpected declining inflation.

Table 5.19 -Refer to Table 5.19.Looking at the table above, what is the rate of growth of real average hourly earnings from 2012 to 2013?

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

Which of the following causes the unemployment rate to understate the true extent of joblessness?

The most widely used measure of inflation is based on which of the following price indices?

Which of the following has a tendency to raise the unemployment rate?

The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation, but ________ quality increases.This causes the CPI to ________ the cost of the market basket.

The unemployment rate has historically been higher in Canada than in the United States.

If firms pay what are called "efficiency wages," they pay wages that

The PPI is the

Which of the following describes actual trends in the Canadian labour force participation rate?

The real interest rate equals the nominal interest rate ________ the inflation rate.

Suppose 180,000 people are employed, 20,000 people are unemployed, and 50,000 people are out of the labour force.Calculate the labour force participation rate.

Which of the following is the smallest portion of the market basket of goods that makes up the CPI?

Table 5.12 -Refer to Table 5.12.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 2015?

Cyclical unemployment is the result of

After the legalization of recreational marijuana, the labour force participation rate would

According to the text, economists consider full employment to occur when

Which of the following cause the unemployment rate as measured by Statistics Canada to understate the true extent of joblessness?

The nominal interest rate will be less than the real interest rate when

Full employment is not considered to be zero unemployment, because

Explain why you would rather be a borrower during a period of unexpected rising inflation, and a lender during a period of unexpected declining inflation.

Table 5.19 -Refer to Table 5.19.Looking at the table above, what is the rate of growth of real average hourly earnings from 2012 to 2013?

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

The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation, but quality increases.This causes the CPI to the cost of the market basket.