Question 1

Women entered the labour force in large numbers in the 20th century and increased the economyʹs GDP.This change
A)created inflationary gaps.
B)created recessionary gaps.
C)raised potential output.
D)was only possible in an economy operating above normal rates of utilization.
E)was only possible in an economy operating below normal rates of utilization.

Accepted Answer

Women entering the labor force in large numbers increased the labor supply, which in turn raised potential output. This means that the economy can produce more goods and services at a higher level of employment without sparking inflationary or recessionary gaps. Therefore, the best choice is C, which states that this change raised potential output.

Question 2

How is Canadaʹs unemployment rate determined?
A)The rate is determined by Canada Census data.
B)The rate is determined by a survey of Canadian employers.
C)The federal government department HRSDC (Human Resources and Skills Development Canada)conducts a monthly survey of the labour force.
D)Statistics Canada conducts a Labour Force Survey each month.
E)An estimate is produced by HRSDC based on the previous monthʹs unemployment rate adjusted by the current monthʹs job losses and job gains.

Accepted Answer

Statistics Canada conducts a monthly Labour Force Survey to determine Canada's unemployment rate. This survey collects data from individuals in households, businesses and institutions to get an accurate picture of the labour force and employment trends. This data is then used to calculate the unemployment rate for the country.

Question 3

Which of the following is the best example of cyclical unemployment?
A)A worker is laid off because his firm had to reduce production due to reduced demand.
B)A worker quits her current job to search for a better one.
C)An ironworker cannot find a job in Ottawa because all job vacancies are in Alberta.
D)Bank tellers are unable to find jobs due to technological advances in the banking system.
E)Inflationary pressures have led to higher wages for all jobs.

Accepted Answer

Cyclical unemployment is caused by a downturn in the business cycle, where firms reduce production and lay off workers due to reduced demand. Thus, option A is the best example of cyclical unemployment. Options B, C, and D are examples of frictional, structural, and technological unemployment, respectively. Option E does not represent any form of unemployment.

Question 4

Suppose a country has an unemployment rate of 20%.If we know that the population is 38 million and the labour force is 25 million,then the number of people unemployed is
A)5 million.
B)13 million.
C)20 million.
D)7.6 million.
E)2.6 million.

Accepted Answer

The unemployment rate is calculated as the number of unemployed individuals divided by the labor force, then multiplied by 100 to get a percentage. Given an unemployment rate of 20% and a labor force of 25 million, the number of unemployed individuals is 20% of 25 million, which equals 5 million.

Question 5

Suppose the city of Calgary,Alberta has a population of 1 million,a labour force of 575 000,and employment is equal to 545 000.The unemployment rate in Calgary is approximately
A)3.0%.
B)5.2%.
C)5.5%.
D)54.5%.
E)57.5%.

Accepted Answer

To find the unemployment rate, we use the formula:

Unemployment rate = (Unemployed / Labour force) × 100%

We are given that the labour force is 575,000 and the employment is 545,000. To find the number of unemployed, we subtract employment from the labour force:

Unemployed = Labour force - Employment
Unemployed = 575,000 - 545,000
Unemployed = 30,000

Now we can plug in these values into the formula:

Unemployment rate = (30,000 / 575,000) × 100%
Unemployment rate = 0.052 (rounded to 3 decimal places) or 5.2%

Therefore, the answer is B) 5.2%.

Question 6

Suppose a small city has a population of 100 000 and a labour force of 60 000.Employment is 55 000 and 5000 workers are unemployed.How many people are not in the labour force?
A)40 000
B)35 000
C)30 000
D)5000
E)0

Accepted Answer

The number of people not in the labour force is the total population minus the labour force. So, 100,000 (total population) - 60,000 (labour force) = 40,000.

Question 7

Suppose the city of Calgary has a population of 1 million,a labour force of 575 000,and employment equal to 545 000.We can conclude that for legal and various other reasons ________ people are excluded from the
A)30 000
B)420 000
C)425 000
D)445 000
E)450 000

Accepted Answer

The difference between the labour force and the number of employed people is the number of unemployed people in the city (575 000 - 545 000 = 30 000). However, there may be people who are not considered part of the labour force, such as retirees, students, and those who are not actively seeking employment. Therefore, to determine the total number of people who are not employed, we subtract the number of employed people from the total population (1 million - 545 000 = 455 000). This includes both those who are part of the labour force and those who are not. To determine the number of people who are not part of the labour force, we subtract the number of unemployed people from this total (455 000 - 30 000 = 425 000). Therefore, we can conclude that 425 000 people are excluded from the labour force for various reasons.

Question 8

If a countryʹs labour force is 15 million people,and 1 million of those are unemployed,the countryʹs unemployment rate is
A)2.5%.
B)3.3%.
C)4.5%.
D)6.7%.
E)7.1%.

Accepted Answer

The unemployment rate is calculated as (Number of Unemployed / Labour Force) * 100. So, (1 million / 15 million) * 100 = 6.7%.

Question 9

Suppose that a countryʹs population is 30 million and it has a labour force of 15 million people.Assuming it has 1.35 million people unemployed,the countryʹs unemployment rate is
A)2.5%.
B)3.3%.
C)4.5%.
D)6.7%.
E)9.0%.

Accepted Answer

The answer of Suppose that a countryʹs population is 30...

Question 10

Suppose that a countryʹs population is 30 million and it has a labour force of 15 million people.If 14.5 million people are employed,the countryʹs unemployment rate is
A)2.5%.
B)3.3%.
C)4.5%.
D)6.7%.
E)9.0%.

Accepted Answer

To find the unemployment rate, we first need to calculate the number of unemployed individuals.

Number of unemployed = Labour force - Employed 
Number of unemployed = 15 million - 14.5 million 
Number of unemployed = 0.5 million

Now we can calculate the unemployment rate as:

Unemployment rate = (Number of unemployed / Labour force) x 100 
Unemployment rate = (0.5 million / 15 million) x 100 
Unemployment rate = 3.333...%

Therefore, the closest option to the calculated rate is B) 3.3%.

Question 11

If 27 million people are employed and 3 million people are unemployed,what is the unemployment rate?
A)11%
B)89%
C)10%
D)90%
E)Not able to determine from the information provided

Accepted Answer

Unemployment rate = (Number of Unemployed / Total labor force) x 100%
Total labor force = Number of employed + Number of unemployed
Total labor force = 27 million + 3 million = 30 million
Unemployment rate = (3 million / 30 million) x 100% = 10%

Question 12

Which of the following is the best example of frictional unemployment?
A)A worker is laid off because his firm has to reduce production due to reduced demand.
B)A worker quits her current job to search for a better one.
C)An ironworker cannot find a job in Ottawa because all job vacancies are in Alberta.
D)Bank tellers are unable to find jobs due to technological advances in the banking system.
E)Inflationary pressures have led to higher wages for all jobs.

Accepted Answer

Frictional unemployment occurs when workers voluntarily leave their jobs to search for better ones or when they are in between jobs. Option A is an example of cyclical unemployment which occurs during a recession or when there is a decline in economic activity. Option C is an example of structural unemployment that occurs due to changes in the structure of the economy. Option D is an example of technological unemployment where workers are replaced by technology. Option E is not an example of unemployment, but rather an increase in wages due to inflation.

Question 13

Workers with experience and skills sometimes lose their jobs and become unemployed due to changing technology or market conditions,even while firms in other industries or regions are looking to hire more workers.This type of unemployment is called
A)cyclical unemployment.
B)frictional unemployment.
C)historical unemployment.
D)natural rate of unemployment.
E)structural unemployment.

Accepted Answer

This type of unemployment is caused by structural factors such as changes in technology or markets, and is therefore called structural unemployment.

Question 14

Consider the growth in Canadaʹs labour force and employment.Over the last 50 years,
A)the labour force has grown much more rapidly than employment.
B)both the labour force and employment have remained roughly constant.
C)the number of unemployed persons has been a much larger fraction of the labour force than it was during the first half of the 20th century.
D)the main trend of the economy has been one of growth in employment that roughly matches the growth in the labour force.
E)the main trend of the economy has been to have employment grow more rapidly than the growth in output.

Accepted Answer

The main trend of the economy over the last 50 years has been one of growth in employment that roughly matches the growth in the labour force. This is evidenced by the fact that despite the growth in the labour force, employment has also grown, indicating that the economy is creating jobs at a rate that keeps up with the increase in the labour force.

Question 15

Canadaʹs unemployment rate has been as low as ________ in the 1960s and as high as ________ during the recession in the early 1980s.
A)4.6; 14
B)2.0; 15
C)5.5; 17
D)2.4; 10
E)3.4; 12

Accepted Answer

The answer of Canadaʹs unemployment rate has been as low...

Question 16

If a countryʹs population is 15 million people,and 1 million of those are unemployed,the countryʹs unemployment rate is
A)2.5%.
B)3.3%.
C)6.7%.
D)7.1%
E)There is not enough information to know.

Accepted Answer

The answer of If a countryʹs population is 15 million...

Question 17

If a countryʹs labour force is 15 million people,and 1.35 million of those are unemployed,the countryʹs unemployment rate is
A)2.5%.
B)3.3%.
C)4.5%.
D)6.7%.
E)9.0%.

Accepted Answer

The answer of If a countryʹs labour force is 15...

Question 18

Cyclical unemployment is associated with which of the following?
A)changes to the economyʹs industrial structure resulting from growth in some industries and decline in others
B)an output level different from the economyʹs potential output
C)differences between the characteristics of the supply of labour and the demand for labour
D)people entering the labour force typically take some time to find a job
E)people quitting their present jobs to look for other jobs

Accepted Answer

Cyclical unemployment is caused by fluctuations in the overall economy, particularly during economic downturns or recessions. During these periods, the level of output in the economy is lower than its potential output, leading to businesses needing fewer workers and ultimately resulting in higher levels of unemployment. Choices A, C, D, and E are associated with other types of unemployment, such as structural, frictional, and voluntary unemployment.

Question 19

A worker is considered unemployed if that worker has no job,is legally eligible to work,
A)and is actively searching for employment.
B)and is not collecting unemployment insurance.
C)whether the worker is looking for a job or is not looking for a job.
D)but only if they previously held a job.
E)but only if they were previously employed for at least three consecutive months.

Accepted Answer

In order for a worker to be considered unemployed, they must not have a job, be legally eligible to work, and be actively searching for employment. This is the standard definition of unemployment used by the U.S. Bureau of Labor Statistics and many other organizations.

Question 20

The unemployment rate will understate the true amount of unemployment if
A)the unemployment rate is rising.
B)crime,divorce,and social unrest are all positively correlated with unemployment.
C)the official unemployment figure excludes discouraged workers who have stopped actively looking for work.
D)the labour force has grown more rapidly than output.
E)the actual unemployment rate is greater than the natural rate of unemployment.

Accepted Answer

The official unemployment figure excludes discouraged workers who have stopped actively looking for work, which understates the true amount of unemployment. These individuals are not counted in the unemployment rate, which only includes those who are actively seeking work.

Quiz 19: What Macroeconomics Is All About

Women entered the labour force in large numbers in the 20th century and increased the economyʹs GDP.This change

How is Canadaʹs unemployment rate determined?

Which of the following is the best example of cyclical unemployment?

Suppose a country has an unemployment rate of 20%.If we know that the population is 38 million and the labour force is 25 million,then the number of people unemployed is

Suppose the city of Calgary,Alberta has a population of 1 million,a labour force of 575 000,and employment is equal to 545 000.The unemployment rate in Calgary is approximately

Suppose a small city has a population of 100 000 and a labour force of 60 000.Employment is 55 000 and 5000 workers are unemployed.How many people are not in the labour force?

Suppose the city of Calgary has a population of 1 million,a labour force of 575 000,and employment equal to 545 000.We can conclude that for legal and various other reasons ________ people are excluded from the

If a countryʹs labour force is 15 million people,and 1 million of those are unemployed,the countryʹs unemployment rate is

Suppose that a countryʹs population is 30 million and it has a labour force of 15 million people.Assuming it has 1.35 million people unemployed,the countryʹs unemployment rate is

Suppose that a countryʹs population is 30 million and it has a labour force of 15 million people.If 14.5 million people are employed,the countryʹs unemployment rate is

If 27 million people are employed and 3 million people are unemployed,what is the unemployment rate?

Which of the following is the best example of frictional unemployment?

Workers with experience and skills sometimes lose their jobs and become unemployed due to changing technology or market conditions,even while firms in other industries or regions are looking to hire more workers.This type of unemployment is called

Consider the growth in Canadaʹs labour force and employment.Over the last 50 years,

Canadaʹs unemployment rate has been as low as in the 1960s and as high as during the recession in the early 1980s.

If a countryʹs population is 15 million people,and 1 million of those are unemployed,the countryʹs unemployment rate is

If a countryʹs labour force is 15 million people,and 1.35 million of those are unemployed,the countryʹs unemployment rate is

Cyclical unemployment is associated with which of the following?

A worker is considered unemployed if that worker has no job,is legally eligible to work,

The unemployment rate will understate the true amount of unemployment if