Deck 5: Introduction to the Macroeconomy

Question 1

Since the early 1990s,which of the following has Canada experienced?

A)rising rates of unemployment, increasing real GDP, and falling rates of inflation
B)falling rates of unemployment, increasing real GDP, and increasing rates of inflation
C)falling rates of unemployment, increasing real GDP, and stable rates of inflation
D)rising rates of unemployment, falling real GDP, and increasing rates of inflation

Answer 1

falling rates of unemployment, increasing real GDP, and stable rates of inflation

Question 2

What does the labour force consists of?

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

Answer 2

all persons aged 15 and over who are working or actively seeking work

Question 3

What does the unemployment rate measure?

A)unemployed workers as a percentage of the population aged 15 and over
B)the number of people unemployed divided by the number of people employed
C)unemployed workers as a percentage of the population
D)unemployed workers as a percentage of the labour force

Answer 3

unemployed workers as a percentage of the labour force

Question 4

What is the total labour force equal to?

A)the number of unemployed persons
B)the number of persons aged 15 and over in the population
C)the number of employed persons
D)the number of employed plus unemployed persons

Question 5

Kathryn chooses to go to university full-time rather than to work.How do economists view Kathryn?

A)as not part of the labour force
B)as employed
C)as part of the labour force and what economists call a discouraged worker
D)as part of the labour force, but not actively seeking work

Question 6

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

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 7

When calculating the unemployment rate,what is the number of unemployed divided by?

A)the population aged 15 and over
B)the entire population
C)the labour force
D)the number of people aged 15 and over who are employed

Question 8

According to economists,why are high rates of unemployment undesirable?

A)Society loses potential production of goods and services.
B)The Employment Insurance program could go bankrupt.
C)They cause the incomes of those that are still working to fall.
D)Everyone has the right to a well-paying job.

Question 9

Which of the following statements about macroeconomic goals is the most accurate?

A)Economic growth must be the ultimate aim of a society.
B)Full employment is the only reasonable objective of macroeconomic policy.
C)Individuals may differ considerably in their evaluation of the relative importance of certain issues.
D)Achieving zero inflation is the main priority of the federal government.

Question 10

What government institution is responsible for calculating the Consumer Price Index?

A)Statistics Canada
B)Bank of Canada
C)Canadian Price Stability Commission
D)Department of Finance

Question 11

How is the unemployment rate calculated?

A)the number of unemployed persons divided by the number of employed plus unemployed persons
B)the number of unemployed persons divided by the number of employed persons
C)the number of unemployed persons divided by the population
D)the number of employed persons divided by the number of unemployed persons

Question 12

If the unemployment rate is 8 percent,what can we conclude?

A)that 8 percent of the labour force is unemployed
B)that 8 percent of the population is unemployed
C)that 8 percent of the population aged 15 and over is unemployed
D)that the number of unemployed persons equals 8 percent of the employed persons

Question 13

Which of the following best describes persons who work 25 hours per week?

A)They are considered to be overemployed.
B)They are considered to be discouraged workers.
C)They are considered to be unemployed.
D)They are considered to part of the labour force.

Question 14

What does the total labour force consist of?

A)the number of employed persons plus those who are not working but could
B)the total population aged 15 and over
C)the number of employed persons plus the number of unemployed persons seeking work
D)the entire population

Question 15

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?

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

Question 16

How is economic growth measured?

A)by changes in the money supply
B)by changes in real GDP
C)by changes in the rate of unemployment
D)by changes in nominal GDP

Question 17

What are the three major macroeconomic goals of nearly every society?

A)reducing unemployment, reducing interest rates, and achieving a high rate of economic growth
B)maintaining stable prices, maintaining high levels of employment, and achieving a high rate of economic growth
C)maintaining stable prices, reducing interest rates, and achieving a high rate of economic growth
D)maintaining high levels of employment, increasing the supply of money, and achieving a high rate of economic growth

Question 18

When the economy does NOT generate enough jobs to employ all those who are willing to work,what can we conclude?

A)The economy must be experiencing a recession.
B)Unemployment insurance and other social welfare programs prevent society from incurring any significant economic costs as a result.
C)Potential goods and services that might have been enjoyed by consumers are lost.
D)The economy must be operating at the full employment level of output.

Question 19

How is the unemployment rate defined?

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 20

Which of the following is NOT a major macroeconomic goal of nearly every society?

A)achieving self-sufficiency in the production of food and energy
B)maintaining stability of prices
C)achieving high rates of economic growth
D)maintaining high levels of employment

Question 21

Hometown,NB,has a labour force of 78 567 persons and employment of 74 382.What is the unemployment rate for the city?

A)5.3 percent
B)5.6 percent
C)6.0 percent
D)7.1 percent

Question 22

Billy loses his job as a road construction worker and cannot find another position with equivalent pay and benefits.As a result,he is still checking the want ads and reporting to the unemployment office on a weekly basis.According to economists,what is he considered to be?

A)a discouraged worker
B)out of the labour force
C)underemployed
D)unemployed

Question 23

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

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

Question 24

Which of the following best describes the presence of discouraged workers?

A)The unemployment rate will tend to overstate the true level of unemployment when they are present.
B)The unemployment rate will tend to understate the true level of unemployment when they are present.
C)They are considered part of the labour force.
D)They are included in the official count of the unemployed.

Question 25

After looking for a job for more than eight months,Kyle has become frustrated and stopped looking.How do economists view Kyle?

A)as cyclically unemployed
B)as unemployed
C)as part of the labour force, but neither employed nor unemployed
D)as a discouraged worker

Question 26

Which of the following factors might cause the unemployment rate to underestimate the true extent of unemployment?

A)Many people have a part-time as well as a full-time job.
B)Employees increase the number of hours they work overtime.
C)There are a large number of people working in the underground economy.
D)Many people become discouraged and cease looking for work.

Question 27

Which of the following factors might cause the unemployment rate to underestimate the true extent of unemployment?

A)People are pretending to look for work so that they can continue receiving EI benefits.
B)There are a large number of people working in the underground economy.
C)Many part-time employees would like to work full-time, but are unable to get the additional work.
D)Employees increase the number of hours they work overtime.

Question 28

What do economists consider persons who do NOT hold jobs,but are actively seeking work?

A)unemployable, and not counted in official statistics.
B)unemployed
C)underemployed
D)out of the labour force

Question 29

Which of the following groups of people would be included in the official unemployment rate?

A)discouraged workers
B)workers temporarily laid off
C)underemployed workers
D)part-time workers

Question 30

If the unemployment rate is 6 percent and the number of persons unemployed is 6 million,how many people are employed?

A)6 million
B)94 million
C)100 million
D)106 million

Question 31

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

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 32

St.Somewhere has a working age population of 20 million.Of those,11 million are employed and 1 million are unemployed.What is the unemployment rate?

A)4%
B)5%
C)6.3%
D)8.3%

Question 33

Which of the following is a discouraged worker?

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 34

In November 2008,the labour force in Centraltown was 14 800.There were 14 483 persons employed.What was the local unemployment rate?

A)1.2 percent
B)2.1 percent
C)5.6 percent
D)7.1 percent

Question 35

If the population older than 16 years of age equals 150 million,the labour force equals 110 million,and the total number of persons employed equals 98 million,then what is the unemployment rate?

A)8 percent
B)10.9 percent
C)28 percent
D)38 percent

Question 36

What does an economist consider a university student who is enrolled in school full-time and NOT seeking employment?

A)underemployed
B)employed in leisure
C)out of the labour force
D)unemployable, and not counted in official statistics

Question 37

Which of the following will occur if a large number of individuals file unemployment claims and work in the underground economy?

A)The unemployment rate will decrease.
B)The unemployment rate will overstate the level of unemployment.
C)The unemployment rate will understate the level of unemployment.
D)The unemployment rate will not be affected.

Question 38

Which of the following individuals is considered officially unemployed?

A)an individual who quits their job to look for a better paying job
B)an individual who quits his job to raise a child
C)a discouraged worker
D)an individual who is not looking for a job because he works in the underground economy

Question 39

Cody has recently graduated from university with an MA in economics.Having been unsuccessful in getting a job in Toronto's financial district,he accepts a job at Home Depot in Kingston.How does Statistics Canada view Cody?

A)as employed
B)as structurally unemployed
C)as frictionally unemployed
D)as underemployed

Question 40

What is the unemployment rate in a town in which 65 400 persons are employed and 11 000 are unemployed?

A)11 percent
B)14.4 percent
C)16.8 percent
D)20.2 percent

Question 41

Which of the following statements best describes unemployment in Canada?

A)Adult males experience lower rates of unemployment than do adult females.
B)Seniors citizens have the highest unemployment level since they are not actively looking for work.
C)Teenagers have unemployment levels that are considerably higher than all other age groups.
D)Teenagers experience lower rates of unemployment than do adults.

Question 42

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?

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

Question 43

When Bob is laid off from his job at the auto plant,which of the following categories would he fall under?

A)a job loser
B)frictionally unemployed
C)a job leaver
D)underemployed

Question 44

The most severe unemployment experienced by Canada was during the Great Depression.When did this period occur?

A)1918-1928
B)1929-1930
C)1929-1939
D)1939-1945

Question 45

Who do economists consider to be discouraged workers?

A)workers who are counted as structurally unemployed, lacking training for the skilled positions for which they are applying
B)workers who have given up looking for a job and are not counted as unemployed
C)workers who are counted as frictionally unemployed, having become dissatisfied with their previous jobs
D)workers whose productivity is low because working in dead-end jobs reduces their morale

Question 46

What percentage of the unemployed do job losers typically account for?

A)10 to 20 percent
B)30 to 40 percent
C)50 to 60 percent
D)80 to 90 percent

Question 47

What do economists consider persons who do NOT hold jobs and are NOT actively seeking work?

A)out of the labour force
B)underemployed
C)unemployable, and not counted in official statistics
D)unemployed

Question 48

Bill looked for work for six months but could not find a job to his liking.He now spends his time at the beach.For purposes of employment,what is he considered to be?

A)unemployed
B)employed in the underground economy
C)underemployed
D)out of the labour force

Question 49

What do economists consider persons who have jobs but are actively looking for other work?

A)underemployed
B)employed
C)out of the labour force
D)overemployed

Question 50

According to economists,what is a discouraged worker?

A)someone who is unemployed and looking for work
B)someone who works part-time, but is actively seeking full-time work
C)someone who has a job, but wants to get a different one
D)someone who gives up looking for work, and is no longer counted as unemployed

Question 51

Why do some critics assert that the unemployment rate understates the unemployment problem?

A)A jobless person can claim to be looking for work even if he or she is not really interested in employment.
B)Involuntary part-time workers and discouraged workers are not included in unemployment statistics.
C)Labour unions may not cooperate fully in providing reliable unemployment information to Statistics Canada.
D)Workers temporarily laid off are included in the unemployment statistics.

Question 52

After unsuccessfully looking for full-time work for six weeks,Joey accepted a part-time job.How does the official unemployment rate fail to reflect the true degree of unemployment in this case?

A)Joey is viewed to be a discouraged worker and as such is not considered part of the labour force.
B)It continues to treat Joey as unemployed because he is only employed part-time.
C)Even though Joey is working less than he wants to work, he is no longer considered unemployed.
D)Since Joey was out of work for only six weeks, he was never officially considered unemployed.

Question 53

Which of the following statements most accurately describes underemployment?

A)People are underemployed when they first enter the job market.
B)People are underemployed if they lose their job because of a recession.
C)People are underemployed when they make less money than someone doing a similar job.
D)People are underemployed if their skills are greater than are necessary for their jobs.

Question 54

Why might the official unemployment rate NOT reflect the true state of unemployment?

A)Some individuals who want to work may become discouraged and cease actively looking for work.
B)Part-time employees are counted as unemployed.
C)Retired workers are considered unemployed.
D)Workers who are laid off from their jobs but looking for new ones are not counted among the unemployed.

Question 55

Since 1976,what has happened to the labour force participation rate?

A)There has been a decrease
B)There was first an increase and then a significant decrease.
C)There has been an increase
D)There has been no change

Question 56

Which of the following statements best describes unemployment in Canada?

A)Adult females experience higher rates of unemployment than do adult males.
B)Teenagers experience lower rates of unemployment than do adult males.
C)People in Western Canada tend to experience lower rates of unemployment than do people in Eastern Canada.
D)People in Eastern Canada tend to experience lower rates of unemployment than do people in Western Canada.

Question 57

What are the four main categories of unemployed workers?

A)new entrants, job losers, job leavers and re-entrants
B)discouraged workers, part-time workers, the cyclically unemployed, and the frictionally unemployed
C)job losers, job leavers, the structurally unemployed, and the frictionally unemployed
D)discouraged workers, job losers, new entrants, and the underemployed

Question 58

What do economists consider a person who works part-time to be?

A)overemployed
B)out of the labour force
C)unemployed
D)employed

Question 59

In 2010,which of these provinces had the lowest unemployment rate?

A)Quebec
B)Ontario
C)Saskatchewan
D)Newfoundland & Labrador

Question 60

In 2010,which Canadian province had the highest levels of unemployment?

A)Ontario
B)British Columbia
C)Quebec
D)Newfoundland

Question 61

What type of unemployment is a federal government program aimed at retraining the unemployed workers of the declining fishing industries designed to reduce?

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

Question 62

Which of the following does structural unemployment include?

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

Question 63

What do economists consider a welder who quits his job and moves from Windsor to Edmonton to try to get a better welding job?

A)cyclically unemployed
B)underemployed
C)frictionally unemployed
D)structurally unemployed

Question 64

When does cyclical unemployment arise?

A)when the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation's food supply
B)when business activity in the macroeconomy declines
C)when the business cycle enters an expansionary phase
D)when labour unions strike for higher wages

Question 65

What would the development of a nationwide,computerized job-bank listing of all job openings be most likely to reduce?

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

Question 66

When does structural unemployment occur?

A)when frictional unemployment exceeds 5 percent of the labour force
B)when a person leaves a job to seek a better position and can't find the job he or she wants
C)when steelworkers are laid off due to a downturn in the economy
D)when automation reduces the need for welders in Oshawa

Question 67

Which of the following people is structurally unemployed?

A)Danielle lost her job when the electronics assembly plant was shut down temporarily due to low product sales in a slumping economy.
B)Brendan left his job as a short-order cook in Prince George to become a short-order cook in New Glasgow. He was unemployed for six weeks during the transition.
C)Mildred quit her job after giving birth to a child.
D)Clem, a skilled corset maker, lost his job when his factory shut down due to a permanent reduction in the demand for corsets.

Question 68

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

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

Question 69

What do economists consider a forestry worker who is out of work because of the temporarily low demand for wood products associated with a recession?

A)frictionally unemployed
B)structurally unemployed
C)cyclically unemployed
D)underemployed

Question 70

What is frictional unemployment?

A)unemployment caused by automation in the workplace
B)unemployment that is due to normal turnover in the labour market
C)unemployment caused by lack of training and education
D)unemployment that is due to the friction of competing ideological systems

Question 71

What is the term for the category of unemployment that is a by-product of geographic and occupational mobility and NOT generally considered to be a serious problem?

A)frictional unemployment
B)structural unemployment
C)underemployment
D)cyclical unemployment

Question 72

If professors lose their positions at universities because of the widespread introduction of courses over the Internet,what would faculty members that remained unemployed be considered?

A)frictionally unemployed
B)structurally unemployed
C)cyclically unemployed
D)underemployed

Question 73

Nicholas has recently lost his job as a welder at an automobile manufacturing plant in Windsor.Tyler,who owns a pipeline construction company in Fort McMurray is desperately trying to hire welders.What is this an example of?

A)lack of occupational mobility
B)natural unemployment
C)labour market imperfections
D)structural unemployment

Question 74

Which of the following statements best describes unemployment in a growing and dynamic economy?

A)The average duration of unemployment will be shorter.
B)Technological advances always lead to the permanent displacement of workers.
C)There is no unemployment.
D)Jobs are constantly being destroyed and created.

Question 75

What is the term for unemployment caused by a contraction in the economy?

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

Question 76

What is the term for unemployment that results from an economy-wide downturn?

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

Question 77

What is the term for unemployment resulting from normal turnover in the labour market?

A)structural unemployment
B)frictional unemployment
C)cyclical unemployment
D)season unemployment

Question 78

Laura has finished her diploma in business and has just started looking for work.What kind of unemployment is she facing?

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

Question 79

When does frictional unemployment occur?

A)when college students go back to school at the end of the summer
B)when there is friction between an employer and employee
C)when a worker decides to quit a job to seek a different job
D)when a large corporation transfers a worker to another city

Question 80

What is the term for unemployment that results from technological changes?

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