Question 1

An example of a seasonally unemployed worker would be

Accepted Answer

A)  a software engineer who is laid off because of declining demand for the software he writes.
B)  a day care provider who quits his job to go back to school.
C)  a General Motors who employee loses her job because the company is downsizing its work force.
D)  a ski lift operator who loses his job when the snow melts in the spring.
E)  a mother who quits her job to stay home with her children.

Question 2

Table 5.5
 
-Refer to Table 5.5.Consider the above values of the consumer price index for 2016 and 2017.The inflation rate for 2017 was equal to

Accepted Answer

A)  215 percent.
B)  21.5 percent.
C)  8.0 percent.
D)  3.9 percent.
E)  2.5 percent.

Question 3

When the labour market is at full employment

Accepted Answer

A)  there is only cyclical unemployment in the economy.
B)  there is only structural unemployment in the economy.
C)  the unemployment rate is 0%.
D)  there is no cyclical unemployment in the economy.
E)  frictional unemployment is less than 2%

Question 4

Suppose 180,000 people are employed,20,000 people are unemployed,and 50,000 people are out of the labour force.Calculate the labour force participation rate.

Accepted Answer

The labour force participation rate is c...

Question 5

Which of the following statements is true about the Canadian economy?

Accepted Answer

A)  Each year,many new jobs are created,but few existing jobs are destroyed,and the unemployed find jobs quickly.
B)  Each year,few new jobs are created,but few existing jobs are destroyed,keeping unemployment low.
C)  Each year,many new jobs are created and many existing jobs are destroyed.
D)  Each year few jobs are created,and therefore it takes the unemployed a long time to find a new job.
E)  Each year many more jobs are destroyed than are created.

Question 6

Paying efficiency wages are a way for a company to cut costs and become more efficient,and are therefore lower than market wages.

Accepted Answer

A) True 
 B)False

Question 7

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.If inflation over the year is 2%,what is the real interest rate you are paying?

Accepted Answer

A)  2%
B)  2.5%
C)  3%
D)  5%
E)  7%

Question 8

Establishing a federal employment agency that speeds up the process of matching unemployed workers with unfilled jobs is an attempt to lower

Accepted Answer

A)  frictional unemployment.
B)  structural unemployment.
C)  cyclical unemployment.
D)  seasonal unemployment.
E)  unnatural unemployment.

Question 9

The inflation rate measures the average prices of goods and services in the economy.

Accepted Answer

A) True 
 B)False

Question 10

If the number of unemployed workers is 20 million,the number of employed workers is 30 million,and the working-age population is 80 million,what is the labour force participation rate?

Accepted Answer

A)  12.5%
B)  18%
C)  37.5%
D)  40%
E)  62.5%

Question 11

You earned $30,000 in 1995,and your salary rose to $80,000 in 2016.If the CPI rose from 82 to 202 between 1995 and 2016,which of the following is true?

Accepted Answer

A)  There was deflation between 1995 and 2016.
B)  The purchasing power of your salary fell between 1995 and 2016.
C)  The purchasing power of your salary remained constant between 1995 and 2016.
D)  The purchasing power of your salary increased between 1995 and 2016.
E)  There is no way to compare the purchasing power of your salary between 1995 and 2016.

Question 12

Table 5.4
 
-Refer to Table 5.4.Assume the market basket for the consumer price index has two products - meat and potatoes - with the above values in 2002 and 2014 for price and quantity.The Consumer Price Index for 2014 equals

Accepted Answer

A)  125.
B)  129.
C)  135.
D)  141.
E)  153.

Question 13

Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?

Accepted Answer

A)  A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year,and the actual rate of inflation ends up being 7 percent per year.
B)  A worker receives a raise in salary that is less than the rate of inflation because management underpredicted inflation.
C)  Firms have to hire an extra worker to change prices in its store because of inflation.
D)  A bank collects a lower amount of interest from a loan because inflation was underpredicted.
E)  A professional pays more income taxes because tax brackets were not adjusted for inflation.

Question 14

A lumberjack loses his job because timber cutting restrictions were imposed by the Environment Canada to protect the spotted owl habitat.This lumberjack would be

Accepted Answer

A)  frictionally unemployed.
B)  cyclically unemployed.
C)  structurally unemployed.
D)  seasonally unemployed.
E)  legally unemployed.

Question 15

The real rate of interest is

Accepted Answer

A)  the nominal interest rate plus the inflation rate.
B)  the nominal interest rate minus the inflation rate.
C)  the interest rate determined by the supply and demand in the money market.
D)  the nominal interest rate.
E)  the interest rate stated on a loan contract.

Question 16

Table 5.14
  The table above reports the nominal average hourly wage and the consumer price index for 1956 and 2012.
-Refer to Table 5.14.The percentage change in real average wage from 1956 to 2015 equals

Accepted Answer

A)  2.0 percent.
B)  8.7 percent.
C)  21.7 percent.
D)  84.6 percent.
E)  154.3 percent.

Question 17

By offering training to workers whose firms laid them off because of competition from foreign firms,the federal government is attempting to reduce

Accepted Answer

A)  frictional unemployment.
B)  structural unemployment.
C)  cyclical unemployment.
D)  seasonal unemployment.
E)  unnatural unemployment.

Question 18

Which of the following is not a cost posed by inflation?

Accepted Answer

A)  Inflation reduces the affordability of goods and services to the average consumer.
B)  The money that consumers and firms hold loses its purchasing power.
C)  Firms must pay for changing prices on products and printing new catalogues.
D)  Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation.
E)  Firms must hire experts to predict inflation more accurately.

Question 19

The nominal interest rate plus the inflation rate equals the real interest rate.

Accepted Answer

A) True 
 B)False

Question 20

Currently,the base year for the CPI is 2002.

Accepted Answer

A) True 
 B)False

Exam 5: Unemployment and Inflation

Table 5.4 -Refer to Table 5.4.Assume the market basket for the consumer price index has two products - meat and potatoes - with the above values in 2002 and 2014 for price and quantity.The Consumer Price Index for 2014 equals

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You earned $30,000 in 1995,and your salary rose to $80,000 in 2016.If the CPI rose from 82 to 202 between 1995 and 2016,which of the following is true?

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The inflation rate measures the average prices of goods and services in the economy.

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Currently,the base year for the CPI is 2002.

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An example of a seasonally unemployed worker would be

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By offering training to workers whose firms laid them off because of competition from foreign firms,the federal government is attempting to reduce

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When the labour market is at full employment

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Suppose 180,000 people are employed,20,000 people are unemployed,and 50,000 people are out of the labour force.Calculate the labour force participation rate.

Correct AnswerverifiedThe labour force participation rate is c...View AnswerShow Answer

Table 5.14 The table above reports the nominal average hourly wage and the consumer price index for 1956 and 2012. -Refer to Table 5.14.The percentage change in real average wage from 1956 to 2015 equals

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Paying efficiency wages are a way for a company to cut costs and become more efficient,and are therefore lower than market wages.

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The real rate of interest is

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A lumberjack loses his job because timber cutting restrictions were imposed by the Environment Canada to protect the spotted owl habitat.This lumberjack would be

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Establishing a federal employment agency that speeds up the process of matching unemployed workers with unfilled jobs is an attempt to lower

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The nominal interest rate plus the inflation rate equals the real interest rate.

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Which of the following is not a cost posed by inflation?

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Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?

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If the number of unemployed workers is 20 million,the number of employed workers is 30 million,and the working-age population is 80 million,what is the labour force participation rate?

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Which of the following statements is true about the Canadian economy?

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Table 5.5 -Refer to Table 5.5.Consider the above values of the consumer price index for 2016 and 2017.The inflation rate for 2017 was equal to

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You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.If inflation over the year is 2%,what is the real interest rate you are paying?

Correct AnswerverifiedShow Answer

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The labour force participation rate is c...
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