Question 1

Policies to substantially reduce unemployment should be targeted at:
A) the short-term unemployed.
B) the long-term unemployed
C) discouraged workers.
D) insiders and outsiders.

Accepted Answer

Targeting policies towards the long-term unemployed is more effective in reducing overall unemployment rates. Long-term unemployed individuals often face more barriers to employment than short-term unemployed individuals, such as skill gaps, lack of job connections and discrimination. Focusing efforts on providing training, education and resources to aid in re-entering the workforce, can have a greater impact on reducing unemployment rates.

Question 2

Most spells of unemployment are ______ term and most weeks of unemployment are attributable to ______-term unemployment.
A) short; short
B) short; long
C) long; long
D) long; short

Accepted Answer

Most spells of unemployment are short term, meaning that any individual period of unemployment typically does not last very long. However, most weeks of unemployment when aggregated across the population are attributable to a smaller number of individuals who are unemployed for a long time. This is because the long-term unemployed, although fewer in number, remain unemployed for much longer periods, thus contributing to a larger total number of unemployment weeks.

Question 3

During the past 50 years the natural rate of unemployment in Canada ______ during the 1970s and 1980s,compared with the 1950s and 1960s,and then ______ during the 1990s,compared with the previous two decades.
A) increased; increased
B) increased; decreased
C) decreased; decreased
D) decreased; increased

Accepted Answer

The natural rate of unemployment in Canada increased during the 1970s and 1980s compared to the 1950s and 1960s due to factors like oil shocks and structural changes in the economy. It then decreased during the 1990s as the economy adjusted and improved.

Question 4

Transitions into and out of the labour force:
A) rarely occur.
B) do not affect unemployment statistics.
C) make unemployment statistics difficult to interpret.
D) reduce the amount of frictional unemployment.

Accepted Answer

Transitions into and out of the labour force can make unemployment statistics difficult to interpret because someone who is not currently employed and not actively seeking work may not be counted as unemployed, even if they want to work. Similarly, someone who is temporarily laid off or seeking part-time work may be counted as employed, even if they are not fully employed. Thus, these transitions can cause fluctuations in unemployment statistics that do not necessarily reflect changes in the overall labour market.

Question 5

In 2012,the unemployment rate in Newfoundland and Labrador was ______ that in Alberta.
A) twice
B) half
C) roughly equal to
D) almost three times

Accepted Answer

According to the data, the unemployment rate in Newfoundland and Labrador in 2012 was 12.4% while in Alberta it was only 4.6%. To find out the ratio of the two rates we can divide 12.4 by 4.6, which gives 2.69. Therefore, the unemployment rate in Newfoundland and Labrador was almost three times that in Alberta.

Question 6

As the relative demand for unskilled workers falls,wages for unskilled workers ______ and unemployment compensation becomes a ______ attractive option.
A) fall; more
B) fall; less
C) rise; more
D) rise; less

Accepted Answer

When the demand for unskilled workers decreases, their wages tend to fall because employers value their labor less. As wages decrease, unemployment compensation becomes relatively more attractive since the difference between working and not working wages narrows.

Question 7

Many economists attribute part of the recent increase in European unemployment to:
A) high birthrates.
B) slow rates of technological change.
C) generous benefits for unemployed workers.
D) increased demand for unskilled workers.

Accepted Answer

Generous benefits for unemployed workers have been identified as contributing to the recent increase in European unemployment, as these benefits can discourage individuals from actively seeking employment.

Question 8

The recent reduced demand for unskilled workers relative to skilled workers has led to ______ for unskilled workers in Europe compared with ______ for unskilled workers in the United States.
A) unemployment; lower wages
B) lower wages; unemployment
C) more unionization; efficiency wages
D) efficiency wages; more unionization

Accepted Answer

In Europe, the reduced demand for unskilled workers has led to higher unemployment rates, while in the United States, it has resulted in lower wages for unskilled workers.

Question 9

All of the following are possible explanations for the trends in the Canadian unemployment rate in the last half of the twentieth century except:
A) the changing composition of the Canadian work force.
B) sectoral shifts.
C) a generally increasing real value of the minimum wage.
D) the links between unemployment and productivity.

Accepted Answer

The other three factors (changing composition of work force, sectoral shifts, links between unemployment and productivity) have all been identified as possible explanations for trends in the Canadian unemployment rate during the latter half of the twentieth century, but there is no evidence to support the idea that a generally increasing real value of the minimum wage has had a significant impact on these trends.

Question 10

The sectoral shifts explanation for changes in the Canadian natural rate of unemployment over the past 50 years rests on the idea that oil-price volatility ______ the rate of job ______.
A) increased; separation
B) decreased; separation
C) increased; findings
D) decreased; findings

Accepted Answer

The sectoral shifts explanation suggests that oil-price volatility has increased the rate of job separation in certain industries, leading to a higher natural rate of unemployment. Choice B, C, and D are all incorrect as they suggest the opposite effect of what the sectoral shifts explanation proposes.

Question 11

Unemployment would decline in the face of rising productivity if:
A) real wages only increased sluggishly.
B) real wages adjusted instantaneously.
C) labour supply remained fixed in the face of increases in labour demand.
D) the demand for labour did not respond to the rising productivity.

Accepted Answer

If real wages only increase sluggishly, then the cost of hiring workers is not increasing rapidly enough to negate the benefits of increased productivity. This means that firms can afford to hire more workers, which would decrease unemployment. If real wages adjusted instantaneously, the cost of hiring workers would increase with productivity, which would negate any decrease in unemployment. Labour supply remaining fixed would not cause unemployment to decrease, as there would still not be enough jobs for everyone. And if the demand for labour did not respond to rising productivity, then there would be no reason for unemployment to decrease.

Question 12

In recent years,the highest unemployment rates in Canada have been in the ________ age bracket.
A) 15-19
B) 20-24
C) 45-54
D) 55-64

Accepted Answer

The 15-19 age bracket typically experiences the highest unemployment rates due to factors such as lack of experience and the transitional nature of this age group from education to the workforce.

Question 13

A spell of unemployment begins when a person leaves his or her job or:
A) withdraws from the labour force.
B) enters the labour force.
C) takes a vacation.
D) has been without a job for at least four weeks.

Accepted Answer

A spell of unemployment begins when a person enters the labour force and is actively seeking work but does not have a job.

Question 14

The demographic explanation for the changes in the Canadian natural rate of unemployment over the past 50 years rests on the idea that:
A) younger workers have higher rates of unemployment.
B) younger workers have lower rates of unemployment.
C) baby-boom workers were more productive than other workers because they had greater access to technology.
D) baby-boom workers had higher than usual rates of job finding.

Accepted Answer

Younger workers typically have higher rates of unemployment due to factors such as less experience and higher job turnover, which can influence the natural rate of unemployment.

Question 15

European unemployment rates are positively correlated with all of the following except:
A) the percentage of the previous wage replaced by employment insurance.
B) the percentage of the labour force that is unionized.
C) the length of the period during which employment-insurance benefits can be collected.
D) the amount of coordination among employers in bargaining with unions.

Accepted Answer

The amount of coordination among employers in bargaining with unions is not typically associated with higher unemployment rates; rather, it can lead to more stable labor relations and potentially lower unemployment.

Question 16

Short-term unemployment is most likely to be ______ unemployment,while long-term unemployment is most likely to be ______ unemployment.
A) structural; frictional
B) structural; the natural rate of
C) the natural rate of; frictional
D) frictional; structural

Accepted Answer

Short-term unemployment typically occurs due to mismatch between job vacancies and job seekers, which falls under frictional unemployment. On the other hand, long-term unemployment is more likely caused by structural factors, such as changes in technology or shifts in the economy, leading to the decline of certain industries or skill sets, hence classified as structural unemployment.

Question 17

In Canada,about ______ of any increase in the unemployment rate is due to longer unemployment spells (longer duration)and about _________ of any increase in the unemployment rate is due to more people becoming unemployed (higher incidence).
A) two-thirds; one-third
B) one-third; two-thirds
C) one-fifth; four-fifths
D) four-fifths; one-fifth

Accepted Answer

In Canada, approximately two-thirds of any increase in the unemployment rate is attributed to longer unemployment spells, while about one-third is due to more people becoming unemployed.

Question 18

Discouraged workers are individuals who:
A) have jobs that do not match their skills (e.g.,a Ph.D.driving a taxi cab).
B) have been unemployed for more than 26 weeks.
C) call themselves unemployed but are not seriously looking for a job.
D) want a job but have given up looking for one.

Accepted Answer

Discouraged workers are individuals who have given up looking for a job. They still want a job but have become discouraged and stopped actively seeking employment. Option A describes underemployment, Option B describes the long-term unemployed, and Option C describes individuals who may be incorrectly identifying themselves as unemployed.

Question 19

Discouraged workers are counted as:
A) part of the labour force.
B) out of the labour force.
C) employed.
D) unemployed.

Accepted Answer

Discouraged workers are those who have given up on seeking employment due to their perceived lack of job opportunities. As a result, they are not considered part of the labour force, and therefore, they are out of the labour force.

Question 20

Spells of unemployment end when the unemployed person finds a job or:
A) withdraws from the labour force.
B) enters the labour force.
C) runs out of employment insurance benefits.
D) refuses to answer the labour force survey questions.

Accepted Answer

Spells of unemployment officially end when someone finds a job or stops actively searching for one and withdraws from the labour force. The other options mentioned are not indicators of the end of unemployment spells.

Quiz 6: Unemployment

Policies to substantially reduce unemployment should be targeted at:

Most spells of unemployment are term and most weeks of unemployment are attributable to -term unemployment.

During the past 50 years the natural rate of unemployment in Canada during the 1970s and 1980s,compared with the 1950s and 1960s,and then during the 1990s,compared with the previous two decades.

Transitions into and out of the labour force:

In 2012,the unemployment rate in Newfoundland and Labrador was ______ that in Alberta.

As the relative demand for unskilled workers falls,wages for unskilled workers and unemployment compensation becomes a attractive option.

Many economists attribute part of the recent increase in European unemployment to:

The recent reduced demand for unskilled workers relative to skilled workers has led to for unskilled workers in Europe compared with for unskilled workers in the United States.

All of the following are possible explanations for the trends in the Canadian unemployment rate in the last half of the twentieth century except:

The sectoral shifts explanation for changes in the Canadian natural rate of unemployment over the past 50 years rests on the idea that oil-price volatility the rate of job .

Unemployment would decline in the face of rising productivity if:

In recent years,the highest unemployment rates in Canada have been in the ________ age bracket.

A spell of unemployment begins when a person leaves his or her job or:

The demographic explanation for the changes in the Canadian natural rate of unemployment over the past 50 years rests on the idea that:

European unemployment rates are positively correlated with all of the following except:

Short-term unemployment is most likely to be unemployment,while long-term unemployment is most likely to be unemployment.

In Canada,about of any increase in the unemployment rate is due to longer unemployment spells (longer duration) and about ___ of any increase in the unemployment rate is due to more people becoming unemployed (higher incidence) .

Discouraged workers are individuals who:

Discouraged workers are counted as:

Spells of unemployment end when the unemployed person finds a job or: