Question 1

The table below uses adjusted data for the year 2000 provided by Statistics Canada. All values are in millions. Fill in the blank entries in the table.

Accepted Answer

The following formulas should be applied...

Question 2

In 2014, how much did the government budget for the EI program?

Accepted Answer

A)   about $5 billion
B)   about $10 billion
C)   about $12 million
D)   about $17 billionE) None of the above
F) B) and D)

Question 3

Statistics Canada uses data from each province's unemployment insurance agency to compute unemployment statistics.

Accepted Answer

A) True 
 B)False

Question 4

From time to time, the demand for workers has risen in one region of Canada and fallen in another. Which type of unemployment does this occurrence illustrate?

Accepted Answer

A)   frictional unemployment created by efficiency wages
B)   structural unemployment created by efficiency wages
C)   frictional unemployment created by sectoral shifts
D)   structural unemployment created by sectoral shiftsE) A) and C)
F) All of the above

Question 5

Which cause of unemployment is associated with a wage rate above the market equilibrium level?

Accepted Answer

A)   mismatch between skills and available jobs
B)   economic recession
C)   sectoral changes
D)   unionsE) A) and B)
F) None of the above

Question 6

Table 9-1
This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. 
-Refer to the Table 9-1. What is the adult female labour-force participation rate in Bolivar?

Accepted Answer

A)   4.76 percent
B)   37.03 percent
C)   38.10 percent
D)   63.16 percentE) C) and D)
F) B) and D)

Question 7

Typically, how much more do union members earn than similar workers who do not belong to a union?

Accepted Answer

A)   0 to 5 percent
B)   5 to 10 percent
C)   10 to 20 percent
D)   20 to 30 percentE) A) and C)
F) A) and B)

Question 8

Which cause of unemployment is NOT associated with a wage rate above the equilibrium level?

Accepted Answer

A)   unions
B)   efficiency wages
C)   employment insurance
D)   minimum-wage lawsE) None of the above
F) All of the above

Question 9

Table 9-1
This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. 
-Refer to the Table 9-1. What is the adult female unemployment rate in Bolivar?

Accepted Answer

A)   4.76 percent
B)   5.56 percent
C)   7.14 percent
D)   8.33 percentE) All of the above
F) A) and D)

Question 10

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Accepted Answer

Standard economic theory suggests that i...

Question 11

Who would be included in the labour force?

Accepted Answer

A)   Derrick, who is waiting for his new job to start
B)   Brett, who has become discouraged looking for a job and has quit looking for a while
C)   Homer, an unpaid homemaker
D)   Dave, a 20-year-old student who does not work and is not looking for workE) B) and C)
F) A) and B)

Question 12

What might increase the natural rate of unemployment?

Accepted Answer

A)   an increased access to the Internet
B)   a natural increase in population
C)   an aging population
D)   an increase in the legal retirement ageE) C) and D)
F) All of the above

Question 13

Where is the unemployment rate more likely higher?

Accepted Answer

A)   where minimum wages are lower, because people don't take low-paid jobs
B)   in the public sector, because less workers are unionized
C)   where EI benefits are higher, because people have less incentive to find jobs
D)   in the private sector, because minimum wages are higherE) A) and B)
F) B) and C)

Question 14

Nancy is searching for a job that suits her tastes about where to live and the people she works with. Laura is looking for a job that makes best use of her skills. Which statement best describes the nature of Nancy and Laura's unemployment?

Accepted Answer

A)   Nancy and Laura are both frictionally unemployed.
B)   Nancy and Laura are both structurally unemployed.
C)   Nancy is frictionally unemployed, and Laura is structurally unemployed.
D)   Nancy is structurally unemployed, and Laura is frictionally unemployed.E) A) and D)
F) A) and C)

Question 15

Which statement best defines the natural rate of unemployment?

Accepted Answer

A)   It is the unemployment rate that would prevail with zero immigration.
B)   It is the rate associated with the highest possible level of GDP.
C)   It is the difference between long-run and short-run unemployment rates.
D)   It is the amount of unemployment that the economy normally experiences.E) B) and C)
F) A) and D)

Question 16

Frictional unemployment exists because of the time it takes for workers to search for the jobs that best suit their tastes and skills.

Accepted Answer

A) True 
 B)False

Question 17

Figure 9-1
This figure shows the effect of a minimum-wage law.
 
-Refer to the Figure 9-1. Which of the following describes the equilibrium point in the diagram where there is an absence of the minimum-wage law?

Accepted Answer

A)   $4 and 20 workers
B)   $5 and 30 workers
C)   $5 and 40 workers
D)   $6 and 40 workersE) B) and C)
F) C) and D)

Question 18

What is most likely to happen when someone becomes unemployed?

Accepted Answer

A)   It is likely that the person will be unemployed a long time and that most of the unemployed he or she joins have been unemployed a long time.
B)   It is likely that the person will be unemployed for a long time, even though most of the unemployed he or she joins have been unemployed for a short time.
C)   It is likely that the person will be unemployed for a short time, even though most of the unemployed he or she joins have been unemployed for a long time.
D)   It is likely that the person will be unemployed for a short time, and that most of the unemployed he or she joins have been unemployed for a short time.E) B) and D)
F) A) and D)

Question 19

Prime Minister Bigego is running for re-election against Finance Minister Pander. Bigego proclaims that more people are working now than when he took office. Pander says that the unemployment rate is higher now than when Bigego took office. What can you conclude?

Accepted Answer

A)   Both of them could be telling the truth if the labour-force participation rate and the labour force both grew.
B)   Both of them could be telling the truth if the labour-force participation rate and the labour force both fell.
C)   Both of them could be telling the truth if the labour force grew slower than employment.
D)   Both of them could be telling the truth if the labour force grew faster than employment.E) A) and B)
F) None of the above

Question 20

What would be the most likely effect of an increase in the world price of oil, which would create a sectoral shift?

Accepted Answer

A)   There would be a decrease in unemployment, and the decrease would be greater in a country with unemployment insurance than in one without.
B)   There would be a decrease in unemployment, but the decrease would be smaller in a country with unemployment insurance than in one without.
C)   There would be an increase in unemployment, and the increase would be greater in a country with unemployment insurance than in one without.
D)   There would be an increase in unemployment, but the increase would be smaller in a country with unemployment insurance than in one without.E) None of the above
F) B) and D)

Exam 9: Unemployment and Its Natural Rate

What would be the most likely effect of an increase in the world price of oil, which would create a sectoral shift?

Correct AnswerverifiedShow Answer

Frictional unemployment exists because of the time it takes for workers to search for the jobs that best suit their tastes and skills.

Correct AnswerverifiedShow Answer

Table 9-1 This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. -Refer to the Table 9-1. What is the adult female unemployment rate in Bolivar?

Correct AnswerverifiedShow Answer

Which cause of unemployment is NOT associated with a wage rate above the equilibrium level?

Correct AnswerverifiedShow Answer

Typically, how much more do union members earn than similar workers who do not belong to a union?

Correct AnswerverifiedShow Answer

Which cause of unemployment is associated with a wage rate above the market equilibrium level?

Correct AnswerverifiedShow Answer

The table below uses adjusted data for the year 2000 provided by Statistics Canada. All values are in millions. Fill in the blank entries in the table.

Correct AnswerverifiedThe following formulas should be applied...View AnswerShow Answer

Figure 9-1 This figure shows the effect of a minimum-wage law. -Refer to the Figure 9-1. Which of the following describes the equilibrium point in the diagram where there is an absence of the minimum-wage law?

Correct AnswerverifiedShow Answer

Prime Minister Bigego is running for re-election against Finance Minister Pander. Bigego proclaims that more people are working now than when he took office. Pander says that the unemployment rate is higher now than when Bigego took office. What can you conclude?

Correct AnswerverifiedShow Answer

In 2014, how much did the government budget for the EI program?

Correct AnswerverifiedShow Answer

What might increase the natural rate of unemployment?

Correct AnswerverifiedShow Answer

Table 9-1 This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. -Refer to the Table 9-1. What is the adult female labour-force participation rate in Bolivar?

Correct AnswerverifiedShow Answer

From time to time, the demand for workers has risen in one region of Canada and fallen in another. Which type of unemployment does this occurrence illustrate?

Correct AnswerverifiedShow Answer

What is most likely to happen when someone becomes unemployed?

Correct AnswerverifiedShow Answer

Statistics Canada uses data from each province's unemployment insurance agency to compute unemployment statistics.

Correct AnswerverifiedShow Answer

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Correct AnswerverifiedStandard economic theory suggests that i...View AnswerShow Answer

Which statement best defines the natural rate of unemployment?

Correct AnswerverifiedShow Answer

Nancy is searching for a job that suits her tastes about where to live and the people she works with. Laura is looking for a job that makes best use of her skills. Which statement best describes the nature of Nancy and Laura's unemployment?

Correct AnswerverifiedShow Answer

Who would be included in the labour force?

Correct AnswerverifiedShow Answer

Where is the unemployment rate more likely higher?

Correct AnswerverifiedShow Answer

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The following formulas should be applied...
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Standard economic theory suggests that i...
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