Question 1

If the number of discouraged searchers decreases because many of them start to look for work, everything else remaining the same, then the

Accepted Answer

A) unemployment rate will increase. 
B) employment-to-population ratio will decrease. 
C) labour force participation rate will increase. 
D) labour force participation rate will decrease. 
E) both A and C 
A) unemployment rate will increase. 
B) employment-to-population ratio will decrease. 
C) labour force participation rate will increase. 
D) labour force participation rate will decrease. 
E) both A and C

Question 2

In a country with a working-age population of 22 million, 16 million are employed, 2 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The unemployment rate is

Accepted Answer

A) 10 percent. 
B) 10.3 percent. 
C) 11.1 percent. 
D) 15.4 percent. 
E) 2 percent. 
A) 10 percent. 
B) 10.3 percent. 
C) 11.1 percent. 
D) 15.4 percent. 
E) 2 percent.

Question 3

Which one of the following people would be counted as unemployed in Canada?

Accepted Answer

A) Simone is currently working but expects to be laid off by the end of the month, before next month's survey can be completed. 
B) Ruth is a 14-year-old student and has been looking for an after-school job every day for the past month. 
C) Sarah has been looking for a job but is taking a month-long break from the job-seeking effort due to her lack of skills. 
D) Rebekah is a recent graduate looking for work. 
E) Ron has quit looking because he believes that there is no work available for him. 
A) Simone is currently working but expects to be laid off by the end of the month, before next month's survey can be completed. 
B) Ruth is a 14-year-old student and has been looking for an after-school job every day for the past month. 
C) Sarah has been looking for a job but is taking a month-long break from the job-seeking effort due to her lack of skills. 
D) Rebekah is a recent graduate looking for work. 
E) Ron has quit looking because he believes that there is no work available for him.

Question 4

R8 is

Accepted Answer

A) long-term unemployment. 
B) the official unemployment rate. 
C) comparable to the official U.S. rate. 
D) short-term unemployment. 
E) the total underemployment rate. 
A) long-term unemployment. 
B) the official unemployment rate. 
C) comparable to the official U.S. rate. 
D) short-term unemployment. 
E) the total underemployment rate.

Question 5

Unemployment caused by permanently decreased demand for horse-drawn carriages is an example of

Accepted Answer

A) cyclical unemployment. 
B) old-fashioned unemployment. 
C) frictional unemployment. 
D) structural unemployment. 
E) discouraged unemployment. 
A) cyclical unemployment. 
B) old-fashioned unemployment. 
C) frictional unemployment. 
D) structural unemployment. 
E) discouraged unemployment.

Question 6

Structural unemployment arises in part because

Accepted Answer

A) there are not enough jobs available. 
B) of technological change. 
C) people become discouraged when they cannot find jobs. 
D) people will not quit their present jobs until they can find suitable employment elsewhere. 
E) of unrealistic wage expectations. 
A) there are not enough jobs available. 
B) of technological change. 
C) people become discouraged when they cannot find jobs. 
D) people will not quit their present jobs until they can find suitable employment elsewhere. 
E) of unrealistic wage expectations.

Question 7

If the CPI was 95 at the end of 2013 and 105 at the end of 2014, what was the inflation rate in 2014?

Accepted Answer

A) 10 percent 
B) 105 percent 
C) 9.5 percent 
D) 5 percent 
E) 10.5 percent 
A) 10 percent 
B) 105 percent 
C) 9.5 percent 
D) 5 percent 
E) 10.5 percent

Question 8

Suppose the working-age population in Tiny Town is 100 people. If 25 of these people are not in the labour force, the ________ equals ________.

Accepted Answer

A) labour force; 75 people 
B) unemployment rate; 25 percent 
C) unemployment rate; 33 percent 
D) employment-to-population ratio; 25 percent 
E) employment-to-population ratio; 75 percent 
A) labour force; 75 people 
B) unemployment rate; 25 percent 
C) unemployment rate; 33 percent 
D) employment-to-population ratio; 25 percent 
E) employment-to-population ratio; 75 percent

Question 9

Use the information below to answer the following questions.
Fact 21.2.1 Some Firms Struggle to Hire Despite High Unemployment
Matching people with available jobs is always difficult after a recession as the economy remakes itself. But labour market data suggest the disconnect is particularly acute this time. Since the recovery began, the number of job openings has risen more than twice as fast as actual hires. If the job market were working normally, openings would be getting filled as they appear. Some 5 million more would be employed and the unemployment rate would be 6.8%, instead of 9.5%.
Source: The Wall Street Journal, August 9, 2010
-Consider Fact 21.2.1. Choose the statement that is incorrect. If the labour market is working properly, there is still unemployment because

Accepted Answer

A) there are always firms laying off workers, and these workers search for another job. 
B) there are always discouraged searchers. 
C) there are always workers leaving one job to search for another job. 
D) there are always workers who have left the labour market in the past and are entering the labour market to search for work. 
E) there are always students who have finished school who are entering the labour market to search for work. 
A) there are always firms laying off workers, and these workers search for another job. 
B) there are always discouraged searchers. 
C) there are always workers leaving one job to search for another job. 
D) there are always workers who have left the labour market in the past and are entering the labour market to search for work. 
E) there are always students who have finished school who are entering the labour market to search for work.

Question 10

The unemployment rate is supposed to measure ________. It is an imperfect measure because ________.

Accepted Answer

A) the number of unemployed plus the number of discouraged searchers expressed as a percentage of the labour force; it excludes the discouraged searchers because Statistics Canada considers them as employed 
B) the percentage of the working-age population who are unemployed; it is impossible to count everyone in the working-age population 
C) the percentage of the labour force who are unemployed; it is impossible to count everyone in the labour force 
D) the underutilization of labour resources; it excludes some underutilized labour and some unemployment is unavoidable 
E) the underutilization of labour resources; it includes part-time workers and excludes discouraged workers 
A) the number of unemployed plus the number of discouraged searchers expressed as a percentage of the labour force; it excludes the discouraged searchers because Statistics Canada considers them as employed 
B) the percentage of the working-age population who are unemployed; it is impossible to count everyone in the working-age population 
C) the percentage of the labour force who are unemployed; it is impossible to count everyone in the labour force 
D) the underutilization of labour resources; it excludes some underutilized labour and some unemployment is unavoidable 
E) the underutilization of labour resources; it includes part-time workers and excludes discouraged workers

Question 11

Use the table below to answer the following questions.
Table 21.2.1
This table shows the answers given by interviewees to the Labour Force Survey.
  
-In Table 21.2.1, which person is structurally unemployed?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) none of them 
A) A 
B) B 
C) C 
D) D 
E) none of them

Question 12

Frictional unemployment

Accepted Answer

A) includes discouraged searchers. 
B) is voluntary part-time unemployment. 
C) includes workers who have lost their jobs due to an economic downturn. 
D) is unemployment associated with normal labour turnover. 
E) occurs when changes in technology change the skills needed to perform jobs. 
A) includes discouraged searchers. 
B) is voluntary part-time unemployment. 
C) includes workers who have lost their jobs due to an economic downturn. 
D) is unemployment associated with normal labour turnover. 
E) occurs when changes in technology change the skills needed to perform jobs.

Question 13

The three types of unemployment are

Accepted Answer

A) frictional, structural, and involuntary. 
B) voluntary, involuntary, and natural. 
C) voluntary, involuntary, and cyclical. 
D) frictional, structural, and cyclical. 
E) cyclical, maternity leave, and paternity leave. 
A) frictional, structural, and involuntary. 
B) voluntary, involuntary, and natural. 
C) voluntary, involuntary, and cyclical. 
D) frictional, structural, and cyclical. 
E) cyclical, maternity leave, and paternity leave.

Question 14

Nominal consumption expenditure is $1,500 billion and Real consumption expenditure is $1,200 billion. The CPIC is

Accepted Answer

A) 0.80. 
B) 125. 
C) 80. 
D) 1.25. 
E) 150. 
A) 0.80. 
B) 125. 
C) 80. 
D) 1.25. 
E) 150.

Question 15

The reference base period is 2002. A consumer price index of 122 in 2014 means that

Accepted Answer

A) prices of consumer goods have gone up by a factor of 12.2. 
B) if the price of a good was $100 in 2002, its price in 2014 is $122. 
C) prices of consumer goods have more than doubled. 
D) the market basket of consumer goods that cost $122 in 2002 can be purchased for $100 in 2014. 
E) the average of the prices paid by urban consumers for a fixed market basket of consumer goods and services was 22 percent higher in 2014 than it was on average during 2002. 
A) prices of consumer goods have gone up by a factor of 12.2. 
B) if the price of a good was $100 in 2002, its price in 2014 is $122. 
C) prices of consumer goods have more than doubled. 
D) the market basket of consumer goods that cost $122 in 2002 can be purchased for $100 in 2014. 
E) the average of the prices paid by urban consumers for a fixed market basket of consumer goods and services was 22 percent higher in 2014 than it was on average during 2002.

Question 16

Use the table below to answer the following questions.
Table 21.2.1
This table shows the answers given by interviewees to the Labour Force Survey.
  
-In Table 21.2.1, which person is cyclically unemployed?

Accepted Answer

A) A 
B) B 
C) C 
D) D and B 
E) A and C 
A) A 
B) B 
C) C 
D) D and B 
E) A and C

Question 17

If the inflation rate is positive, the price level in an economy is

Accepted Answer

A) falling rapidly. 
B) rising. 
C) constant. 
D) falling slowly. 
E) zero. 
A) falling rapidly. 
B) rising. 
C) constant. 
D) falling slowly. 
E) zero.

Question 18

Table 21.3.3
  
-Refer to Table 21.3.3. The IMF World Economic Outlook reports the price level data given in the table. The region with the highest inflation rate in 2007 is ________. The region with the highest inflation rate in 2008 is ________.

Accepted Answer

A) the Euro area; the United States 
B) Japan; the United States 
C) the Euro area; Japan 
D) the United States; Japan 
E) the United States; the Euro area 
A) the Euro area; the United States 
B) Japan; the United States 
C) the Euro area; Japan 
D) the United States; Japan 
E) the United States; the Euro area

Question 19

Of the following sequences of price levels, which correctly represents a 5 percent inflation rate?

Accepted Answer

A) 100, 100, 100, 100 
B) 100, 105, 105, 105 
C) 100, 105, 110, 115 
D) 100, 105, 110.25, 115.76 
E) 95, 100, 105, 110 
A) 100, 100, 100, 100 
B) 100, 105, 105, 105 
C) 100, 105, 110, 115 
D) 100, 105, 110.25, 115.76 
E) 95, 100, 105, 110

Question 20

Use the table below to answer the following questions.
Table 21.3.1
Suppose a simple economy produces three goods only.
The price and output data for some selected years are shown below.
  
-Refer to Table 21.3.1. The reference base period is 2002. The CPI in 2002 is

Accepted Answer

A) 1,340. 
B) 158. 
C) 100. 
D) 96. 
E) 63. 
A) 1,340. 
B) 158. 
C) 100. 
D) 96. 
E) 63.

Exam 21: Monitoring Jobs and Inflation

If the number of discouraged searchers decreases because many of them start to look for work, everything else remaining the same, then the

In a country with a working-age population of 22 million, 16 million are employed, 2 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The unemployment rate is

Which one of the following people would be counted as unemployed in Canada?

R8 is

Unemployment caused by permanently decreased demand for horse-drawn carriages is an example of

Structural unemployment arises in part because

If the CPI was 95 at the end of 2013 and 105 at the end of 2014, what was the inflation rate in 2014?

Suppose the working-age population in Tiny Town is 100 people. If 25 of these people are not in the labour force, the ________ equals ________.

The unemployment rate is supposed to measure ________. It is an imperfect measure because ________.

Use the table below to answer the following questions. Table 21.2.1 This table shows the answers given by interviewees to the Labour Force Survey. -In Table 21.2.1, which person is structurally unemployed?

Frictional unemployment

The three types of unemployment are

Nominal consumption expenditure is $1,500 billion and Real consumption expenditure is $1,200 billion. The CPIC is

The reference base period is 2002. A consumer price index of 122 in 2014 means that

Use the table below to answer the following questions. Table 21.2.1 This table shows the answers given by interviewees to the Labour Force Survey. -In Table 21.2.1, which person is cyclically unemployed?

If the inflation rate is positive, the price level in an economy is

Table 21.3.3 -Refer to Table 21.3.3. The IMF World Economic Outlook reports the price level data given in the table. The region with the highest inflation rate in 2007 is ________. The region with the highest inflation rate in 2008 is ________.

Of the following sequences of price levels, which correctly represents a 5 percent inflation rate?

Use the table below to answer the following questions. Table 21.3.1 Suppose a simple economy produces three goods only. The price and output data for some selected years are shown below. -Refer to Table 21.3.1. The reference base period is 2002. The CPI in 2002 is

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Suppose the working-age population in Tiny Town is 100 people. If 25 of these people are not in the labour force, the equals .

The unemployment rate is supposed to measure . It is an imperfect measure because .

Table 21.3.3 -Refer to Table 21.3.3. The IMF World Economic Outlook reports the price level data given in the table. The region with the highest inflation rate in 2007 is . The region with the highest inflation rate in 2008 is .