Question 1

If the number of employed persons in a country equals 24 million,the number of unemployed persons equals 8 million,and the number of persons over age 16 in the population equals 40 million,what is the unemployment rate?

Accepted Answer

A) 8 percent 
B) 20 percent 
C) 25 percent 
D) 32 percent

Question 2

Under what circumstances might the unemployment rate overestimate the true extent of unemployment?

Accepted Answer

A) if many part-time employees would like to work full-time, but are unable to get the additional work 
B) if people become discouraged and stop looking for work 
C) if people falsely claim that they are actively seeking work in order to receive unemployment benefits 
D) if employees increases the number of hours that they work overtime

Question 3

Which of the following statements about inflation is the most accurate?

Accepted Answer

A) It can increase the real income of unionized workers. 
B) It can cause a redistribution of income from borrowers to creditors. 
C) It may encourage investment and economic growth. 
D) It can decrease the value of a nation's currency relative to other nations.

Question 4

What is the unemployment rate in a city with a labour force of 359 500 persons where 320 000 persons are employed?

Accepted Answer

A) 7.8 percent 
B) 11.0 percent 
C) 12.3 percent 
D) 14.5 percent

Question 5

Cyclical unemployment rises and falls with fluctuations in the macroeconomy.

Accepted Answer

A) True 
 B)False

Question 6

If Roger voluntarily leaves his job as a mechanic and spends a period of time seeking another,what kind of unemployment is he facing?

Accepted Answer

A) structural 
B) seasonal 
C) frictional 
D) cyclical

Question 7

How is the unemployment rate defined?

Accepted Answer

A) part-time workers plus full-time workers, divided by the total population aged 15 and over 
B) unemployed workers plus discouraged workers, divided by the total population aged 15 and over 
C) the percentage of the labour force that is unemployed 
D) the percentage of the population aged 15 and over that is unemployed

Question 8

Which of the following is NOT a cost of inflation?

Accepted Answer

A) shoe leather costs 
B) menu costs 
C) a distortion of price signals 
D) cost of living clauses in labour contracts

Question 9

All adults who are able to work are automatically counted as part of the nation's labour force.

Accepted Answer

A) True 
 B)False

Question 10

When does inflation exist in the economy?

Accepted Answer

A) whenever the price of a good decreases 
B) whenever the overall price level is rising 
C) whenever the economy experiences a contraction 
D) whenever the price of a good increases

Question 11

What would happen to the unemployment rate if everyone who has looked for a job for more than six months gives up in despair and stops looking?

Accepted Answer

A) It would fall. 
B) It would increase. 
C) It would not change. 
D) It would change, but the effect cannot be predicted.

Question 12

In recent years,where have economists come to believe that full employment in the Canadian economy occurs?

Accepted Answer

A) at an employment rate between 1.0 and 2.0 percent 
B) at an employment rate between 2.0 and 3.0 percent 
C) at an employment rate between 4.0 and 5.0 percent 
D) at an employment rate between 6.0 and 7.0 percent

Question 13

What is the most significant real economic cost of high unemployment?

Accepted Answer

A) the potential goods and services that might have been produced but weren't 
B) the lost tax revenue that might have been paid by persons if they had worked 
C) the money cost of retraining persons to obtain new jobs 
D) the money cost of unemployment insurance payments to the unemployed

Question 14

What does the labour force consists of?

Accepted Answer

A) all persons aged 15 and over who are working, plus those not working 
B) all persons aged 15 and over who are working or actively seeking work 
C) discouraged workers, employed workers, plus those actively seeking work 
D) all persons aged 15 and over who are able to work

Question 15

Which of the following groups are NOT typically harmed by unexpected inflation?

Accepted Answer

A) lenders 
B) borrowers 
C) pensioners on fixed incomes 
D) people whose incomes are tied to long-term contracts

Question 16

The real interest rate is calculated by factoring out inflation from the nominal interest rate.

Accepted Answer

A) True 
 B)False

Question 17

The current cost of a market basket of goods is $6000.The cost of the same basket of goods in the base year was $4000.What is the current price index?

Accepted Answer

A) 133 
B) 150 
C) 160 
D) 600

Question 18

What is the result of an unanticipated period of deflation?

Accepted Answer

A) a redistribution of income from lenders to borrowers 
B) a redistribution of income from workers to employers 
C) a redistribution of income from borrowers to lenders 
D) a redistribution of income from taxpayers to governments

Question 19

Which of the following is a discouraged worker?

Accepted Answer

A) someone who opts to quit work to attend college 
B) a skilled worker who accepts an unskilled job 
C) a part-time worker who would like to work more hours 
D) someone who opts to quit searching for work after unsuccessfully seeking employment

Question 20

Which of the following does structural unemployment include?

Accepted Answer

A) unemployment caused by automation that displaces workers from their jobs 
B) unemployment caused by workers who leave positions to seek better jobs 
C) unemployment caused by a decline in the economy's total production 
D) unemployment caused by the geographical and occupational mobility of the labour force

Exam 5: Introduction to the Macroeconomy

If the number of employed persons in a country equals 24 million,the number of unemployed persons equals 8 million,and the number of persons over age 16 in the population equals 40 million,what is the unemployment rate?

Under what circumstances might the unemployment rate overestimate the true extent of unemployment?

Which of the following statements about inflation is the most accurate?

What is the unemployment rate in a city with a labour force of 359 500 persons where 320 000 persons are employed?

Cyclical unemployment rises and falls with fluctuations in the macroeconomy.

If Roger voluntarily leaves his job as a mechanic and spends a period of time seeking another,what kind of unemployment is he facing?

How is the unemployment rate defined?

Which of the following is NOT a cost of inflation?

All adults who are able to work are automatically counted as part of the nation's labour force.

When does inflation exist in the economy?

What would happen to the unemployment rate if everyone who has looked for a job for more than six months gives up in despair and stops looking?

In recent years,where have economists come to believe that full employment in the Canadian economy occurs?

What is the most significant real economic cost of high unemployment?

What does the labour force consists of?

Which of the following groups are NOT typically harmed by unexpected inflation?

The real interest rate is calculated by factoring out inflation from the nominal interest rate.

The current cost of a market basket of goods is $6000.The cost of the same basket of goods in the base year was $4000.What is the current price index?

What is the result of an unanticipated period of deflation?

Which of the following is a discouraged worker?

Which of the following does structural unemployment include?