Question 1

The higher the rate of inflation,the lower the redistribution effect of inflation.

Accepted Answer

A) True 
 B)False

Question 2

-Refer to the information above to answer this question.What is the value of real GDP in 2016?

Accepted Answer

A) $7.9 
B) $790 
C) $1,137.6 
D) $6,336 
E) $14,962 
A) $7.9 
B) $790 
C) $1,137.6 
D) $6,336 
E) $14,962

Question 3

What is core CPI?

Accepted Answer

A) CPI which includes all items whose prices fluctuate from period to period. 
B) CPI which includes items whose prices can fluctuate wildly from period to period. 
C) CPI which excludes items whose prices can fluctuate wildly from period to period. 
D) CPI which excludes items whose prices do not fluctuate from period to period. 
A) CPI which includes all items whose prices fluctuate from period to period. 
B) CPI which includes items whose prices can fluctuate wildly from period to period. 
C) CPI which excludes items whose prices can fluctuate wildly from period to period. 
D) CPI which excludes items whose prices do not fluctuate from period to period.

Question 4

Define the concepts of discouraged workers,and explain why,due to its presence,we need to handle the official unemployment figures published by StatsCan with care.

Accepted Answer

Discouraged workers are people who don't

Question 5

What is real income?

Accepted Answer

A) It is nominal income times the price level. 
B) It is nominal income divided by the price level. 
C) It is the change in nominal income divided by the price level. 
D) It is the change in nominal income divided by the change in the price level. 
E) It is the change in nominal income minus the change in the price level. 
A) It is nominal income times the price level. 
B) It is nominal income divided by the price level. 
C) It is the change in nominal income divided by the price level. 
D) It is the change in nominal income divided by the change in the price level. 
E) It is the change in nominal income minus the change in the price level.

Question 6

Explain the output costs of inflation.

Accepted Answer

Inflation lowers output because of a low

Question 7

What is the labour force status of a student who is looking for a job following graduation from college?

Accepted Answer

A) She is not officially included in the labour force. 
B) She is a part of structural unemployment. 
C) She is part of cyclical unemployment. 
D) She is part of frictional unemployment. 
A) She is not officially included in the labour force. 
B) She is a part of structural unemployment. 
C) She is part of cyclical unemployment. 
D) She is part of frictional unemployment.

Question 8

What would be the effect of 100,000 discouraged workers entering the labour force?

Accepted Answer

A) Unemployment rates would remain unchanged,and the size of the labour force would increase. 
B) Both unemployment rates and the size of the labour force would increase. 
C) Unemployment rates would increase,and the size of the labour force would remain unchanged. 
D) Both unemployment rates and the size of the labour force would decrease. 
A) Unemployment rates would remain unchanged,and the size of the labour force would increase. 
B) Both unemployment rates and the size of the labour force would increase. 
C) Unemployment rates would increase,and the size of the labour force would remain unchanged. 
D) Both unemployment rates and the size of the labour force would decrease.

Question 9

Suppose there are 2 million unemployed workers seeking jobs.After a period of time,two hundred thousand of them become discouraged over their job prospects and stop looking for work.What will the effect of this on the unemployment rate?

Accepted Answer

A) It will increase in the short run but would eventually decline. 
B) It will increase. 
C) It will fall. 
D) It will be unchanged. 
E) The question cannot be answered from this information. 
A) It will increase in the short run but would eventually decline. 
B) It will increase. 
C) It will fall. 
D) It will be unchanged. 
E) The question cannot be answered from this information.

Question 10

Why might the official unemployment rate be an understatement of actual levels?

Accepted Answer

A) Because both part-time workers and discouraged workers are included. 
B) Because both part-time workers as well as those collecting EI but not actively seeking work are included. 
C) Because people working in the underground economy are not included. 
D) Because part-time workers are considered employed,and discouraged workers are not considered unemployed. 
E) Because those not actively seeking work while collecting EI benefits and those in the underground economy are included. 
A) Because both part-time workers and discouraged workers are included. 
B) Because both part-time workers as well as those collecting EI but not actively seeking work are included. 
C) Because people working in the underground economy are not included. 
D) Because part-time workers are considered employed,and discouraged workers are not considered unemployed. 
E) Because those not actively seeking work while collecting EI benefits and those in the underground economy are included.

Question 11

Why is deflation undesirable?

Accepted Answer

A) Because it causes a fall in real incomes. 
B) Because it causes a fall in tax revenues. 
C) Because it causes consumers to overspend. 
D) Because it causes consumers to postpone spending. 
A) Because it causes a fall in real incomes. 
B) Because it causes a fall in tax revenues. 
C) Because it causes consumers to overspend. 
D) Because it causes consumers to postpone spending.

Question 12

All of the following except one are examples of the redistributive effects of inflation.Which is the exception?

Accepted Answer

A) The economy's growth slows due to a drop in the level of investment. 
B) The real rate of interest on a 20-year mortgage steadily falls. 
C) A wealthy couple,both in sales,experience commission pay increases equal to the inflation rate. 
D) A retired couple continue to live on fixed-rate-bond interest. 
A) The economy's growth slows due to a drop in the level of investment. 
B) The real rate of interest on a 20-year mortgage steadily falls. 
C) A wealthy couple,both in sales,experience commission pay increases equal to the inflation rate. 
D) A retired couple continue to live on fixed-rate-bond interest.

Question 13

How is the real interest rate determined?

Accepted Answer

A) By subtracting the bank rate from the nominal interest rate. 
B) By dividing the nominal interest rate by the Consumer Price Index. 
C) By subtracting the rate of inflation from the nominal interest rate. 
D) By multiplying the nominal interest rate by the rate of inflation. 
A) By subtracting the bank rate from the nominal interest rate. 
B) By dividing the nominal interest rate by the Consumer Price Index. 
C) By subtracting the rate of inflation from the nominal interest rate. 
D) By multiplying the nominal interest rate by the rate of inflation.

Question 14

Assume an economy is producing only one product and that year 1 is the base year.Output and price data for a five-year period are as follows:
  
-Refer to the information above to answer this question.What is the nominal GDP in year 2?

Accepted Answer

A) $180. 
B) $2,250. 
C) $2,000. 
D) $2,500. 
A) $180. 
B) $2,250. 
C) $2,000. 
D) $2,500.

Question 15

Assume that the CPI in 2015 is 115.The inflation rate is 1.5% in 2016 and 2.5% in 2017.What is the value of the CPI in 2016 and 2017?

Accepted Answer

A) 113.5 and 110 
B) 116.5 and 119 
C) 116.5 and 117.5 
D) 116.7 and 119.6 
E) 117.5 and 119.6 
A) 113.5 and 110 
B) 116.5 and 119 
C) 116.5 and 117.5 
D) 116.7 and 119.6 
E) 117.5 and 119.6

Question 16

What is core inflation?

Accepted Answer

Core CPI excludes items whose

Question 17

In 2017 Robinson's nominal income rose by 4% and the price level rose by 6%.What can we conclude about Robinson's real income?

Accepted Answer

A) It may have either increased or decreased. 
B) It rose by 2%. 
C) It fell by 2%. 
D) It rose by 10%. 
E) It fell by 2.4%. 
A) It may have either increased or decreased. 
B) It rose by 2%. 
C) It fell by 2%. 
D) It rose by 10%. 
E) It fell by 2.4%.

Question 18

Which of the following people would be regarded as unemployed according to the Statistics Cananda definition?

Accepted Answer

A) A steelworker who,laid off a year ago,has given up looking for a job. 
B) A homemaker on vacation with the family. 
C) A homemaker who does volunteer work with the local library. 
D) A homemaker who works 5 hours per week at the minimum wage at the local library. 
E) A retired schoolteacher who is seeking a part-time job at the local library. 
A) A steelworker who,laid off a year ago,has given up looking for a job. 
B) A homemaker on vacation with the family. 
C) A homemaker who does volunteer work with the local library. 
D) A homemaker who works 5 hours per week at the minimum wage at the local library. 
E) A retired schoolteacher who is seeking a part-time job at the local library.

Question 19

Suppose actual output is equal to potential output,the natural rate of unemployment is 4% and frictional unemployment is 1%.What are cyclical and structural unemployment rates?

Accepted Answer

Cyclical unemployment is 0% because the

Question 20

If a person does not have a job,they are unemployed.

Accepted Answer

A) True 
 B)False

The higher the rate of inflation,the lower the redistribution effect of inflation.

-Refer to the information above to answer this question.What is the value of real GDP in 2016?

What is core CPI?

Define the concepts of discouraged workers,and explain why,due to its presence,we need to handle the official unemployment figures published by StatsCan with care.

What is real income?

Explain the output costs of inflation.

What is the labour force status of a student who is looking for a job following graduation from college?

What would be the effect of 100,000 discouraged workers entering the labour force?

Suppose there are 2 million unemployed workers seeking jobs.After a period of time,two hundred thousand of them become discouraged over their job prospects and stop looking for work.What will the effect of this on the unemployment rate?

Why might the official unemployment rate be an understatement of actual levels?

Why is deflation undesirable?

All of the following except one are examples of the redistributive effects of inflation.Which is the exception?

How is the real interest rate determined?

Assume an economy is producing only one product and that year 1 is the base year.Output and price data for a five-year period are as follows: -Refer to the information above to answer this question.What is the nominal GDP in year 2?

Assume that the CPI in 2015 is 115.The inflation rate is 1.5% in 2016 and 2.5% in 2017.What is the value of the CPI in 2016 and 2017?

What is core inflation?

In 2017 Robinson's nominal income rose by 4% and the price level rose by 6%.What can we conclude about Robinson's real income?

Which of the following people would be regarded as unemployed according to the Statistics Cananda definition?

Suppose actual output is equal to potential output,the natural rate of unemployment is 4% and frictional unemployment is 1%.What are cyclical and structural unemployment rates?

If a person does not have a job,they are unemployed.

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters

Exam 4: Measuring the Economy 2: Unemployment and Inflation

The higher the rate of inflation,the lower the redistribution effect of inflation.

-Refer to the information above to answer this question.What is the value of real GDP in 2016?

What is core CPI?

Define the concepts of discouraged workers,and explain why,due to its presence,we need to handle the official unemployment figures published by StatsCan with care.

What is real income?

Explain the output costs of inflation.

What is the labour force status of a student who is looking for a job following graduation from college?

What would be the effect of 100,000 discouraged workers entering the labour force?

Suppose there are 2 million unemployed workers seeking jobs.After a period of time,two hundred thousand of them become discouraged over their job prospects and stop looking for work.What will the effect of this on the unemployment rate?

Why might the official unemployment rate be an understatement of actual levels?

Why is deflation undesirable?

All of the following except one are examples of the redistributive effects of inflation.Which is the exception?

How is the real interest rate determined?

Assume an economy is producing only one product and that year 1 is the base year.Output and price data for a five-year period are as follows: -Refer to the information above to answer this question.What is the nominal GDP in year 2?

Assume that the CPI in 2015 is 115.The inflation rate is 1.5% in 2016 and 2.5% in 2017.What is the value of the CPI in 2016 and 2017?

What is core inflation?

In 2017 Robinson's nominal income rose by 4% and the price level rose by 6%.What can we conclude about Robinson's real income?

Which of the following people would be regarded as unemployed according to the Statistics Cananda definition?

Suppose actual output is equal to potential output,the natural rate of unemployment is 4% and frictional unemployment is 1%.What are cyclical and structural unemployment rates?

If a person does not have a job,they are unemployed.

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters