Deck 16: Unemployment: Meaning, Measurement, and Canadas Experience

Question 1

Which of the following characterizes developments in international differences in unemployment since the mid-1990s (in the industrialized world)?

A) Persistently high rates in Japan
B) Persistently high rates in all of Europe, and the opposite in North America and Australia
C) Relatively high rates in most English-speaking countries, and relatively low rates in much of continental Europe
D) Relatively low rates in most English-speaking countries, and relatively high rates in much of continental Europe
E) Unusually high rates of unemployment in Canada after the early 1980s

Answer 1

D

Question 2

Which of the following is thought to be the primary reason for the existence of the unemployment rate gap between the United States and Canada?

A) There has been a relative increase among Canadians in the fraction of non-working time spent searching for work relative to Americans.
B) There is a longer duration of unemployment in Canada relative to the U.S.
C) The aggregate demand conditions tend to be more favourable in the U.S.
D) The labour force in Canada has a higher concentration of demographic groups that tend to exhibit higher rates of unemployment.
E) Wages are higher in Canada, which reduces the quantity demanded for labour.

Answer 2

A

Question 3

Workers become unemployed when all of the following events occur, except when:

A) They are jobless and decide that they will not actively seek work because they believe that no suitable work is available.
B) They re-enter the labour market after completing an educational degree.
C) They lose their jobs due to layoffs.
D) They quit their jobs and do not find work immediately.
E) They re-enter the labour market after spending time in the non-market activities

Answer 3

A

Question 4

Which of the following statements concerning gross flows and net flows is true?

A) Only gross flows are relevant for determining the unemployment rate
B) If the net flow is zero, then the gross flow is zero
C) Gross flows are typically smaller than net flows
D) Net flows take account of workers moving in both directions between labour market states
E) In a steady state, gross flows are equal to zero

Question 5

The labour force participation rate gives the ratio of the:

A) working age population that is employed vs. unemployed.
B) working age population that is seeking work vs. those not seeking work.
C) employed workers to the size of the labour force.
D) labour force to the employment level.
E) working age population that is either employed or is seeking work.

Question 6

The Great Depression had an enormous impact on how economists view the nature of unemployment. Until that time, the conventional view was the classical view. Unemployment was generally considered to be voluntary in nature and a disequilibrium situation. After the Great Depression, the conventional view became the Keynesian view, according to which unemployment was very static in nature and due to an equilibrium with too few jobs. In the 1970s, this conventional view was replaced by the "new view" attributed to Feldstein, which emphasized the dynamic nature of unemployment. The experience of the 1980s gave way to the current view - which is thought to apply in Canada and parts of Western Europe - called the "modified new view."
Describe each of these three views of the nature of unemployment. In each case, mention the economic events which caused economists to modify their view. The roles of both the incidence and the duration of unemployment and the role of labour force turnover are different in each case.
Describe them. For each of the three cases, describe the distribution of the burden of unemployment. In other words, which groups of workers were particularly affected?

Question 7

Which group of unemployed workers accounts for the greatest share of the flow into unemployment?

A) New entrants into the labour force
B) Discouraged workers
C) Job quitters
D) Job losers
E) Re-entrants into the labour force

Question 8

Which of the following quantities does not refer to labour force dynamics?

A) The average duration of unemployment
B) The stock of long-term unemployed workers
C) Net flows of workers in and out of employment
D) Gross flows of workers in and out of employment
E) Net flows in and out of unemployment

Question 9

The unemployment rate is expressed as:

A) the number of unemployed workers divided by the number of employed workers.
B) the number of jobless workers divided by the size of the labour force.
C) the fraction of the working age population that is unemployed.
D) one minus the fraction of the population that is employed.
E) the number of unemployed workers divided by the size of the labour force.

Question 10

"Hidden unemployment" refers to situations in which workers are:

A) unemployed but not collecting unemployment insurance benefits, and are thus not counted as officially unemployed.
B) jobless and become so discouraged that they drop out of the labour force.
C) unemployed and are actively seeking work, but are missed by surveyors from Statistics Canada.
D) working fewer hours than they desire to work, and these hours of unemployment are not counted towards the calculation of the official unemployment rate.
E) unemployed and actively seeking work but could not find any employment before their unemployment insurance benefits run out.

Question 11

Which of the following statements concerning the incidence of unemployment is true?

A) It tends to target all workers reasonably equally.
B) Older workers are as likely to be affected as younger workers.
C) It tends to be concentrated among workers in certain demographic groups.
D) It turns to be lower during the recession periods.
E) It is the same thing as the duration of unemployment.

Question 12

What was the ball-park estimate for the labour force participation rate and the employment rate in Canada in the mid-2000s?

A) 67% and 62%, respectively
B) 70% and 65%, respectively
C) 70% and 75%, respectively
D) 50% and 45%, respectively
E) 62% and 67%, respectively

Question 13

An analysis of the incidence rates of unemployment and the average duration of unemployment across demographic groups reveals that:

A) There is no apparent pattern.
B) The comparisons tend to change a lot over time.
C) Those groups with the highest incidence tend to exhibit the shortest durations and vice-versa.
D) Those groups with the highest incidence tend to exhibit the longest durations and vice-versa.
E) Data is not available in order to make these comparisons.

Question 14

Canada's official unemployment rate since the year 2000 has been in the range of:

A) 5.5 to 7%.
B) 10 to 12%.
C) 8 to 10%.
D) 4 to 6%.
E) 7-9%.

Question 15

Which of the following statements is false?

A) Since the mid-1980s, the unemployment rate in Canada has exceeded the rate in the United States.
B) For much of the post-World War II period, unemployment rates in Canada behaved very similarly.
C) Compared to most European countries, unemployment is high in Canada.
D) Jobless Canadians are more likely than their American counterparts to declare that they are unemployed.
E) Unemployment in Canada was high by historical standards for most of the 1990s.

Question 16

According to the "new view" or the "turnover view' of unemployment, _.

A) the incidence of unemployment is important but the duration of unemployment is not
B) unemployment is characterized primarily by a core of workers that have been jobless for a long time
C) the unemployment rate is persistent over time
D) employment instability plays a major role in a dynamic labour market
E) the labour market is moving toward an equilibrium, where full employment exists

Question 17

All of the following are presented by Statistics Canada as supplementary measures of unemployment, except:

A) counting discouraged workers among the unemployed.
B) counting the under-employed among the unemployed.
C) counting all of the jobless as unemployed.
D) counting those waiting to be recalled and those with long-term future start dates as unemployed.
E) counting only the long-term unemployed as unemployed.

Question 18

Which of the following is NOT a fact about unemployment during 2008-09 financial crisis?

A) Unemployment rates rose considerably worldwide.
B) Canadian unemployment rate in 2008-09 rose substantially and was higher than past recession in the 80s and 90s.
C) Hidden unemployment rose during the crisis.
D) Canadian unemployment rate was lower than that in the United States during the crisis.
E) All of the choices are correct.