Deck 21: Monitoring Jobs and Inflation

Question 1

In a country with a working-age population of 30 million, 18 million are employed, 2 million are unemployed, and 2 million of the employed are working part-time, half of whom wish to work full-time. The labour force participation rate is

A)73.3 percent.
B)66.7 percent.
C)60 percent.
D)53.3 percent.
E)20 percent.

Answer 1

B

Question 2

Which one of the following people would be counted as unemployed in Canada?

A)Simone is currently working but expects to be laid off by the end of the month, before next month's survey can be completed.
B)Ruth is a 14-year-old student and has been looking for an after-school job every day for the past month.
C)Sarah has been looking for a job but is taking a month-long break from the job-seeking effort due to her lack of skills.
D)Rebekah is a recent graduate looking for work.
E)Ron has quit looking because he believes that there is no work available for him.

Answer 2

D

Question 3

In a country with a working-age population of 20 million, 13 million are employed, 1.5 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The size of the labour force is

A)20 million.
B)15.5 million.
C)14.5 million.
D)13 million.
E)11.5 million.

Answer 3

C

Question 4

The labour force is the total number of

A)people employed.
B)people aged 15 years and over.
C)people in the working-age population who are employed.
D)people in the working-age population who are either employed or unemployed.
E)full-time workers.

Question 5

Which one of the following people would be counted as unemployed in Canada?

A)Veena is not working, but she is looking for a full-time job.
B)Kathy has stopped looking for work since she was unable to find a suitable job during a one-month search.
C)Sharon is a college student with a job.
D)Christos was laid off from his job a month ago and has not been looking for a new job, as he is waiting for a severance package from his former employer.
E)Benoit was laid off when his firm closed down two months ago and has not been looking for work, as he is going back to school.

Question 6

In a country with a working-age population of 22 million, 16 million are employed, 2 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The involuntary part-time rate is

A)6.3 percent.
B)12.5 percent.
C)2.8 percent.
D)5 percent.
E)0.5 percent.

Question 7

In a country with a working-age population of 22 million, 16 million are employed, 2 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The employment-to-population ratio is

A)72.7 percent.
B)65 percent.
C)75.5 percent.
D)57.5 percent.
E)16 percent.

Question 8

Which one of the following people would be counted as unemployed in Canada?

A)Doris works only 5 hours a week but is looking for a full-time job.
B)Kanhaya has stopped looking for work since he was unable to find a suitable job during a two-month search.
C)Sharon recently began looking for work after staying at home for 10 years to look after her children.
D)Maurice is on a two-month vacation out of the country but is still looking for a job using the Internet.
E)Taylor is a homemaker.

Question 9

In a country with a working-age population of 20 million, 13 million are employed, 1.5 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The labour force participation rate is

A)75.5 percent.
B)72.5 percent.
C)65 percent.
D)57.5 percent.
E)14.5 percent.

Question 10

If the working-age population increases, then

A)the size of the labour force will increase.
B)the number of people employed will increase.
C)the unemployment rate will increase.
D)the labour force participation rate will increase.
E)the total number of people aged 15 years and above will increase.

Question 11

Which one of the following people would be counted as unemployed in Canada?

A)a part-time worker who repeatedly expresses a desire to become a full-time worker
B)a person who has been seeking a job for the last six months, but recently gave up looking because he was discouraged by his job prospects
C)a person who will be starting a new job in 6 months
D)a person who expects to be laid off by the end of the month before next month's survey can be completed
E)a person who has been laid off for 10 weeks and is not looking for a job because he is waiting to be called back to his old job

Question 12

In a country with a working-age population of 30 million, 18 million are employed, 2 million are unemployed, and 2 million of the employed are working part-time, half of whom wish to work full-time. The unemployment rate is

A)10 percent.
B)9.1 percent.
C)14.3 percent.
D)11.1 percent.
E)2 percent.

Question 13

The unemployment rate is defined as the number of

A)unemployed people divided by the number of employed people.
B)employed people divided by the number of people in the country.
C)unemployed people divided by the number of people in the country.
D)unemployed people divided by the sum of the people employed and the people unemployed.
E)unemployed people divided by the number of people in the country who are employed.

Question 14

In a country with a working-age population of 30 million, 18 million are employed, 2 million are unemployed, and 2 million of the employed are working part-time, half of whom wish to work full-time. The employment-to-population ratio is

A)73.3 percent.
B)66.7 percent.
C)60 percent.
D)53.3 percent.
E)18 percent.

Question 15

Who of the following would be counted as unemployed in Canada?

A)Doris only works five hours a week but is looking for a full-time job.
B)Kanhaya has stopped looking for work since he was unable to find a suitable job during a two-month search.
C)Sharon is a college student with no job.
D)Maurice has been laid off from his job for 20 weeks but expects to be called back soon.
E)Bogdan has been laid off from his job but does not expect to be called back, and is not looking.

Question 16

Counting involuntary part-time workers as unemployed would

A)not change the actual unemployment rate.
B)lower the measured unemployment rate.
C)raise the natural unemployment rate.
D)raise the full employment rate.
E)raise the measured unemployment rate.

Question 17

In a country with a working-age population of 22 million, 16 million are employed, 2 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. The unemployment rate is

A)10 percent.
B)10.3 percent.
C)11.1 percent.
D)15.4 percent.
E)2 percent.

Question 18

Who of the following would be counted as unemployed in Canada?

A)Caitlin, who is 14 years old and looking for a babysitting job.
B)James, who is a full-time student looking for a part-time job.
C)Youngmin, who is a part-time hamburger flipper looking for a full-time job.
D)Emmanuel, who lost his job at the steel plant when an automated assembly line was introduced six months ago, and has been job searching every day.
E)Vik, who has been staying at home watching reruns of "Hockey Night in Canada" and not searching since he was laid off at the flour mill.

Question 19

In a country with a working-age population of 30 million, 18 million are employed, 2 million are unemployed, and 2 million of the employed are working part-time, half of whom wish to work full-time. The labour force is

A)30 million.
B)18 million.
C)20 million.
D)22 million.
E)16 million.

Question 20

The working-age population is the total number of people

A)in the labour force.
B)in the labour force who are employed.
C)aged 15 years and over.
D)in the labour force, aged 15 years and over.
E)in the labour force, aged 15 years and over, and employed.

Question 21

In a recession, typically

A)unemployment rises.
B)the employment-to-population ratio decreases.
C)the employment-to-population rate rises.
D)the labour force participation rate rises.
E)Both A and B are correct.

Question 22

In a country with a working-age population of 30 million, 18 million are employed, 2 million are unemployed, and 2 million of the employed are working part-time, half of whom wish to work full-time. The involuntary part-time rate is

A)10 percent.
B)5 percent.
C)4.8 percent.
D)4.5 percent.
E)0.5 percent.

Question 23

Which of the following statements is incorrect?

A)The labour force is equal to the number of people employed plus the number of people unemployed.
B)The unemployment rate is the number of persons who are unemployed divided by the labour force, all multiplied by 100.
C)The labour-force participation rate is the labour force divided by the working-age population, all multiplied by 100.
D)The employment-to-population ratio is the number of people employed divided by the working-age population, all multiplied by 100.
E)The involuntary part-time rate is the number of involuntary part-time workers divided by the number employed, all multiplied by 100.

Question 24

R2 is

A)long-term unemployment.
B)the official unemployment rate.
C)comparable to the official U.S. rate.
D)short-term unemployment.
E)the unemployment rate that adds discouraged searchers to the official rate.

Question 25

R4 is

A)long-term unemployment.
B)the official unemployment rate.
C)comparable to the official U.S. rate.
D)short-term unemployment.
E)the unemployment rate that adds discouraged searchers to the official rate.

Question 26

In a country with a working-age population of 22 million, 16 million are employed, 2 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. If 500,000 of those unemployed are cyclically unemployed, what is the natural unemployment rate?

A)11.1 percent
B)5.6 percent
C)8.3 percent
D)9.4 percent
E)1.5 percent

Question 27

If the labour force participation rate is rising and the working-age population is not changing, then the

A)size of the labour force is rising.
B)number of unemployed people is rising and the size of the labour force is falling.
C)size of the labour force is falling.
D)number of unemployed people is falling and the size of the labour force is rising.
E)number of employed people must be increasing.

Question 28

The employment-to-population ratio is

A)the percentage of the working-age population who are employed.
B)the percentage of the labour force who are unemployed or employed.
C)the percentage of the working-age population who are unemployed or employed.
D)the percentage of the labour force who are employed.
E)none of the above

Question 29

In an expansion, typically

A)unemployment increases.
B)the labour force participation rate increases.
C)the employment-to-population ratio decreases.
D)employment decreases.
E)the number of discouraged searchers increases.

Question 30

In a recession, typically

A)unemployment decreases.
B)the labour force participation rate increases.
C)the employment-to-population ratio decreases.
D)the employment-to-population ratio increases.
E)the labour force participation rate does not change.

Question 31

Suppose the working-age population in Tiny Town is 100 people. If 25 of these people are not in the labour force, the ________ equals ________.

A)labour force; 75 people
B)unemployment rate; 25 percent
C)unemployment rate; 33 percent
D)employment-to-population ratio; 25 percent
E)employment-to-population ratio; 75 percent

Question 32

If the people who take early retirement are not counted in the working-age population, then

A)the unemployment rate would be lower.
B)the labour force participation rate would be less.
C)the unemployment rate would be higher.
D)the labour force participation rate would be higher.
E)the number of discouraged searchers would decrease.

Question 33

Which of the following pieces of information do you need to calculate the labour force participation rate?
I. the number of employed persons
II. the number of unemployed persons
III. the population
IV. the working age population

A)I and II
B)I and III
C)I, II, and III
D)I, II, and IV
E)I, II, III, and IV

Question 34

Since 1960, Canadian labour force participation rate has ________ and the unemployment rate has ________.

A)trended higher; trended higher
B)trended lower; varied over the business cycle
C)varied over the business cycle; trended higher
D)trended higher; varied over the business cycle
E)trended higher; trended lower

Question 35

The labour force participation rate is

A)the percentage of the working-age population who are employed.
B)the percentage of the labour force who are unemployed or employed.
C)the percentage of the working-age population who are either unemployed or employed.
D)the percentage of the labour force who are employed.
E)equal to the employment-to-population ratio plus the unemployment rate.

Question 36

The working-age population can be divided into two groups:

A)those who are employed and those who are unemployed.
B)those in the labour force and discouraged workers.
C)those who work full time and those who work part time.
D)those in the labour force and those not in the labour force.
E)those who are over the age of 15 and those who are under the age of 15.

Question 37

R8 is

A)long-term unemployment.
B)the official unemployment rate.
C)comparable to the official U.S. rate.
D)short-term unemployment.
E)the total underemployment rate.

Question 38

R1 is

A)long-term unemployment.
B)the official unemployment rate.
C)comparable to the official U.S. rate.
D)short-term unemployment.
E)the unemployment rate that adds discouraged searchers to the official rate.

Question 39

In a country with a working-age population of 30 million, 18 million are employed, 2 million are unemployed, and 2 million of the employed are working part-time, half of whom wish to work full-time. If 1 million of those unemployed are cyclically unemployed, what is the natural unemployment rate?

A)5.6 percent
B)5 percent
C)6.7 percent
D)11.1 percent
E)1 percent

Question 40

Which of the following are not included in the working-age population?

A)discouraged searchers
B)involuntary part-time workers
C)retired workers
D)students over the age of 15
E)children under the age of 15

Question 41

Table 21.2.1
This table shows the answers given by interviewees to the Labour Force Survey.

Use the table below to answer the following questions.
In Table 21.2.1, which person is cyclically unemployed?

A)A
B)B
C)C
D)D and B
E)A and C

Question 42

Structural unemployment arises in part because

A)there are not enough jobs available.
B)of technological change.
C)people become discouraged when they cannot find jobs.
D)people will not quit their present jobs until they can find suitable employment elsewhere.
E)of unrealistic wage expectations.

Question 43

Which one of the following people is structurally unemployed?

A)a Saskatchewan welder who lost her job when her company relocated to B. C. and is currently looking for a job
B)a Nova Scotia fishery worker who is searching for a better job closer to home
C)a steel worker who is laid off but who expects to be called back soon
D)an office worker who has lost her job because of a general slowdown in economic activity
E)a student who recently graduated and is looking for work

Question 44

If the economy is operating at full employment, then

A)everyone who wants a job has one.
B)the entire labour force is employed.
C)the unemployment rate is approximately 3 percent.
D)the unemployment rate is zero.
E)the unemployment rate is equal to the frictional unemployment rate plus the structural unemployment rate.

Question 45

A zero percent unemployment rate

A)is one of the economic goals of the Canadian government.
B)would alleviate scarcity.
C)is not consistent with the notion of full employment.
D)was last achieved during World War II when everyone was willing to work at the going wage rate to end the war.
E)is the only efficient unemployment rate.

Question 46

Table 21.2.1
This table shows the answers given by interviewees to the Labour Force Survey.

Use the table below to answer the following questions.
In Table 21.2.1, which person is structurally unemployed?

A)A
B)B
C)C
D)D
E)none of them

Question 47

If the economy is at full employment, then

A)the entire population is employed.
B)the entire labour force is employed.
C)the only unemployment is frictional unemployment plus discouraged workers.
D)the unemployment rate is less than 3 percent.
E)all unemployment arises from normal frictions and structural change.

Question 48

Michael lost his job as a night security guard because he kept falling asleep at the job. Now he is looking for a new job. Michael is

A)frictionally unemployed.
B)structurally unemployed.
C)not unemployed.
D)cyclically unemployed.
E)not in the labour force.

Question 49

At full employment, there is no

A)natural unemployment.
B)unemployment.
C)cyclical unemployment.
D)structural unemployment.
E)frictional unemployment.

Question 50

At full employment, the unemployment rate

A)should be zero.
B)is greater than zero percent due to natural unemployment.
C)increases as the price level rises.
D)decreases as the price level falls.
E)averages 6 percent.

Question 51

Table 21.2.1
This table shows the answers given by interviewees to the Labour Force Survey.

Use the table below to answer the following questions.
In Table 21.2.1, which person is frictionally unemployed?

A)A
B)B
C)C
D)E
E)none of them

Question 52

Which one of the following people is cyclically unemployed?

A)a Saskatchewan welder who lost her job when her company relocated to B. C. and is currently looking for a job
B)a Nova Scotia fishery worker who is searching for a better job closer to home
C)a steel worker who is laid off but who expects to be called back soon
D)an office worker who has lost her job because of a general slowdown in economic activity
E)a student who recently graduated and is looking for work

Question 53

Unemployment caused by permanently decreased demand for horse-drawn carriages is an example of

A)cyclical unemployment.
B)old-fashioned unemployment.
C)frictional unemployment.
D)structural unemployment.
E)discouraged unemployment.

Question 54

Full employment does not mean that there is zero unemployment because

A)some cyclical unemployment is always present.
B)some frictional and structural unemployment is always present.
C)business fluctuations are inevitable.
D)of the existence of discouraged workers.
E)of unrealistic wage expectations.

Question 55

Full employment

A)occurs when all unemployment is cyclical and structural.
B)occurs when all unemployment is frictional and discouraged.
C)occurs when there is zero unemployment.
D)occurs when there is zero frictional unemployment.
E)occurs when there is zero cyclical unemployment.

Question 56

Caitlin is working part-time at the Mr. G store, but wants to work full-time. She is

A)frictionally unemployed.
B)structurally unemployed.
C)not in the labour force.
D)cyclically unemployed.
E)counted as employed.

Question 57

Jesse just graduated from university, and is looking for her first job. Jesse is

A)frictionally unemployed.
B)structurally unemployed.
C)not unemployed.
D)cyclically unemployed.
E)not in the labour force.

Question 58

Which one of the following people is frictionally unemployed? A steel worker who

A)loses her job because of technological change.
B)is laid off but expects to be called back soon.
C)gives up her job because she retires.
D)decides to leave the labour force and become a full-time student.
E)becomes discouraged and stops looking for a job.

Question 59

The natural unemployment rate is

A)equal to 0 percent.
B)the same as the cyclical unemployment rate.
C)the rate at which cyclical unemployment is equal to 6 percent.
D)the rate at which cyclical unemployment is equal to 0 percent.
E)the rate at which all unemployment is structural.

Question 60

Table 21.2.1
This table shows the answers given by interviewees to the Labour Force Survey.

Use the table below to answer the following questions.
In Table 21.2.1, which person is a discouraged searcher?

A)A
B)B
C)C
D)D
E)none of them

Question 61

Fact 21.2.1 Some Firms Struggle to Hire Despite High Unemployment
Matching people with available jobs is always difficult after a recession as the economy remakes itself. But labour market data suggest the disconnect is particularly acute this time. Since the recovery began, the number of job openings has risen more than twice as fast as actual hires. If the job market were working normally, openings would be getting filled as they appear. Some 5 million more would be employed and the unemployment rate would be 6.8%, instead of 9.5%.
Source: The Wall Street Journal, August 9, 2010
Consider Fact 21.2.1. The 5 million workers who cannot find jobs because of mismatching in the labour market are counted as part of the economy's ________ unemployment because ________.

A)cyclical; the economy is rebounding from a recession
B)cyclical; there is a mismatch between their skills and the skills required for the available jobs
C)structural; there is a mismatch between their skills and the skills required for the available jobs
D)structural; the economy is rebounding from a recession
E)frictional; finding jobs after a recession is a normal part of the labour market

Question 62

Fact 21.2.1 Some Firms Struggle to Hire Despite High Unemployment
Matching people with available jobs is always difficult after a recession as the economy remakes itself. But labour market data suggest the disconnect is particularly acute this time. Since the recovery began, the number of job openings has risen more than twice as fast as actual hires. If the job market were working normally, openings would be getting filled as they appear. Some 5 million more would be employed and the unemployment rate would be 6.8%, instead of 9.5%.
Source: The Wall Street Journal, August 9, 2010
Consider Fact 21.2.1. Choose the statement that is incorrect. If the labour market is working properly, there is still unemployment because

A)there are always firms laying off workers, and these workers search for another job.
B)there are always discouraged searchers.
C)there are always workers leaving one job to search for another job.
D)there are always workers who have left the labour market in the past and are entering the labour market to search for work.
E)there are always students who have finished school who are entering the labour market to search for work.

Question 63

The unemployment rate is supposed to measure ________. It is an imperfect measure because ________.

A)the number of unemployed plus the number of discouraged searchers expressed as a percentage of the labour force; it excludes the discouraged searchers because Statistics Canada considers them as employed
B)the percentage of the working-age population who are unemployed; it is impossible to count everyone in the working-age population
C)the percentage of the labour force who are unemployed; it is impossible to count everyone in the labour force
D)the underutilization of labour resources; it excludes some underutilized labour and some unemployment is unavoidable
E)the underutilization of labour resources; it includes part-time workers and excludes discouraged workers

Question 64

Suppose the country of Tiny Town experiences frictional unemployment. This frictional unemployment would

A)signal that the country is in a recession.
B)be considered a natural occurrence in a growing economy.
C)signal the number of discouraged searchers is growing.
D)increase structural unemployment.
E)decrease the output gap.

Question 65

Counting discouraged searchers as unemployed would

A)not change the measured unemployment rate.
B)lower the measured unemployment rate.
C)raise the natural unemployment rate.
D)raise the full employment rate.
E)raise the measured unemployment rate.

Question 66

When the unemployment rate is less than the natural unemployment rate, real GDP is ________ than potential GDP and the output gap is ________.

A)greater; positive
B)smaller; positive
C)greater; negative
D)smaller; negative
E)greater; equal to zero

Question 67

Henelyn lost her job as a factory worker when she was replaced by a robotic machine. Now she is looking for a new job. Henelyn is

A)frictionally unemployed.
B)structurally unemployed.
C)not unemployed.
D)cyclically unemployed.
E)not in the labour force.

Question 68

Frictional unemployment

A)includes discouraged searchers.
B)is voluntary part-time unemployment.
C)includes workers who have lost their jobs due to an economic downturn.
D)is unemployment associated with normal labour turnover.
E)occurs when changes in technology change the skills needed to perform jobs.

Question 69

The three types of unemployment are

A)frictional, structural, and involuntary.
B)voluntary, involuntary, and natural.
C)voluntary, involuntary, and cyclical.
D)frictional, structural, and cyclical.
E)cyclical, maternity leave, and paternity leave.

Question 70

Suppose the economy is experiencing frictional unemployment of 1 percent, structural unemployment of 3 percent and cyclical unemployment of 4 percent. What is the natural unemployment rate?

A)3 percent
B)4 percent
C)5 percent
D)7 percent
E)8 percent

Question 71

Suppose that the unemployment rate equals 4.5 percent and that the natural unemployment rate is 5.5 percent. We can conclude that

A)potential GDP is greater than real GDP.
B)potential GDP equals real GDP.
C)potential GDP is less than real GDP.
D)we have mismeasured the natural unemployment rate.
E)real GDP is greater than nominal GDP.

Question 72

Rochelle lost her job as a salesperson when sales fell off during the recession. Now she is looking for a new job. Rochelle is

A)frictionally unemployed.
B)structurally unemployed.
C)not unemployed.
D)cyclically unemployed.
E)not in the labour force.

Question 73

Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent. Then cyclical unemployment is

A)1 percent.
B)-1 percent.
C)8 percent.
D)0 percent.
E)3.5 percent.

Question 74

Some unemployment is unavoidable because

A)people are making transitions through the stages of life and businesses are making transitions.
B)many part-time workers would like to have full-time work.
C)often people become discouraged searchers.
D)many people in the working-age population attend school and are unemployed.
E)there is always some cyclical unemployment.

Question 75

People end unemployment when they

A)retire from a job.
B)quit work to go to school.
C)quit work to raise a family.
D)are recalled from a layoff.
E)are laid off.

Question 76

When the unemployment rate ________ the natural unemployment rate, real GDP ________ potential GDP.

A)equals; is less than
B)is greater than; is less than
C)is less than; is less than
D)equals; is greater than
E)is greater than; equals

Question 77

If the economy is at full employment,

A)the entire population is employed.
B)the entire labour force is employed.
C)the only unemployment is frictional unemployment plus discouraged searchers.
D)real GDP equals potential GDP.
E)all unemployment is cyclical and structural.

Question 78

People become unemployed when they

A)retire.
B)are on maternity leave.
C)quit working to go to university.
D)leave university and start seeking work.
E)become discouraged searchers.

Question 79

If the number of discouraged searchers decreases because many of them start to look for work, everything else remaining the same, then the

A)unemployment rate will increase.
B)employment-to-population ratio will decrease.
C)labour force participation rate will increase.
D)labour force participation rate will decrease.
E)both A and C

Question 80

If the number of discouraged searchers increases, everything else remaining the same, then the

A)unemployment rate will increase.
B)employment-to-population ratio will decrease.
C)labour force participation rate will increase.
D)labour force participation rate will decrease.
E)employment-to-population ratio will increase.