Question 1

If the unemployment rate is 6 percent and the number of employed is 24 million,then the labour force equals ______ million.

Accepted Answer

The formula for calculating the labor force is:
Labor Force = Number of Employed + Number of Unemployed
We are given that the unemployment rate is 6 percent. Therefore, the number of unemployed can be calculated as follows:
Unemployed = (Unemployment Rate/100) x Labor Force
6 percent of Labor Force = (6/100) x Labor Force = 0.06 x Labor Force

We are also given that the number of employed is 24 million.

So, Labor Force = Number of Employed + Number of Unemployed
Labor Force = 24 million + 0.06 x Labor Force

Solving for Labor Force:

0.94 x Labor Force = 24 million

Labor Force = 24 million / 0.94

Labor Force = 25.53 million (rounded to one decimal place)

Therefore, the labor force equals 25.5 million (option C).

Question 2

Assume that the market basket of goods and services purchased in 2004 by the average family in Canada costs $14,000 in 2004 prices,whereas the same basket costs $21,000 in 2009 prices.However,the basket of goods and services actually purchased by the average family in 2009 costs $20,000 in 2009 prices,whereas this same basket would have cost $15,000 in 2004 prices.Given this data,a Laspeyres index of 2009 prices would be:

Accepted Answer

The Laspeyres index is calculated using the formula: (Cost of base year basket at current year prices) / (Cost of base year basket at base year prices). Here, it is ($21,000 / $14,000) = 1.50.

Question 3

According to the Labour Force Survey,the number of jobs in Canada shrank by 7000 during the month of February 2014,yet the unemployment rate remained constant at 7%.It is likely that the unemployment rate was unaffected because:

Accepted Answer

The unemployment rate remained constant despite the decrease in the number of jobs because the participation rate fell. This means that fewer people were actively seeking employment, which offsets the decrease in the number of jobs.

Question 4

The number of households interviewed in the monthly labour force survey conducted by Statistics Canada is approximately:

Accepted Answer

Statistics Canada conducts the Labour Force Survey by interviewing approximately 56,000 households each month to gather data on employment and unemployment.

Question 5

The CPI is a:

Accepted Answer

The CPI (Consumer Price Index) is a Laspeyres price index because it measures the change in the cost of a fixed basket of goods and services that consumers purchase over time. The Laspeyres formula uses the prices of the base year as weights, which means that the CPI measures the cost of the same basket of goods and services purchased in the base year at the current period's prices.

Question 6

According to the definition used by Statistics Canada,people are considered to be unemployed if they:

Accepted Answer

Statistics Canada considers people unemployed if they are without work, actively seeking employment, and available to start work, including those who have found a job but are waiting to start.

Question 7

If the number employed increases while the number unemployed does not change,the unemployment rate:

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed people by the total labor force (employed + unemployed). If the number employed increases while the number unemployed does not change, the total labor force will increase and the unemployment rate will decrease.

Question 8

Unlike the GDP deflator,the CPI includes the prices of:

Accepted Answer

The CPI includes the prices of imported goods, while the GDP deflator only includes domestic goods and services.

Question 9

When prices of different goods are increasing by different amounts,the price index that will rise the fastest is:

Accepted Answer

The CPI, or Consumer Price Index, tends to rise the fastest among the options given when prices of different goods are increasing by different amounts. This is because the CPI is based on a fixed basket of goods and services, making it more sensitive to price changes in those specific items compared to indices like the GDP deflator, which reflects prices for all domestically produced goods and services, or the Paasche and Fisher indices, which adjust the basket over time or use a hybrid approach, respectively.

Question 10

An increase in the price of imported goods will show up in:

Accepted Answer

The answer of An increase in the price of imported...

Question 11

An increase in the price of goods bought by firms and the government will show up in:

Accepted Answer

The GDP deflator includes all goods produced within a country, including those purchased by firms and the government, whereas the CPI only includes goods purchased by households. Therefore, an increase in the price of goods bought by firms and the government will be reflected in the GDP deflator but not in the CPI.

Question 12

Economists have estimated that the CPI ______ inflation by approximately ______ percentage point(s)per year.

Accepted Answer

Economists generally believe that the Consumer Price Index (CPI) tends to overestimate inflation by about 0.5 percentage points per year due to factors like substitution bias and quality improvements not being fully accounted for.

Question 13

Assume that the market basket of goods and services purchased in 2004 by the average family in Canada costs $14,000 in 2004 prices,whereas the same basket costs $21,000 in 2014 prices.However,the basket of goods and services actually purchased by the average family in 2014 costs $20,000 in 2014 prices,whereas this same basket would have cost $15,000 in 2004 prices.Given this data,a Paasche index of 2014 prices relative to 2004 prices would be:

Accepted Answer

The Paasche index is calculated as the ratio of the cost of a fixed basket of goods and services in the current period to the cost of the same basket in the base period, using current period prices. In this case, the cost of the basket in 2014 prices is $20,000, and the cost of the same basket in 2004 prices is $15,000. Therefore, the Paasche index is $20,000/$15,000 = 1.33.

Question 14

If an increasing proportion of the adult population is retired,then the labour force participation rate:

Accepted Answer

The labour force participation rate measures the proportion of the working-age population that is either employed or actively seeking employment. If an increasing proportion of the adult population is retired, it means fewer people are actively seeking employment, which will lead to a decrease in the labour force participation rate. Therefore, the best choice is B.

Question 15

Measuring the rate of inflation using a market basket that excludes food and energy prices is preferred by some analysts because this measure,called core inflation:

Accepted Answer

Excluding food and energy prices from the market basket provides a better measure of ongoing, sustained price changes because these prices tend to be more volatile and can fluctuate widely due to supply and demand factors that are not necessarily related to overall inflation. By excluding them, analysts can focus more accurately on the underlying trend in price changes over time.

Question 16

According to the definition used by Statistics Canada,a person is not in the labour force if that person:

Accepted Answer

According to the definition used by Statistics Canada, if a person is going to school, they are not considered a part of the labour force. This is because they are not currently seeking or available for employment.

B) is incorrect as a person who is temporarily absent from a job due to illness is considered part of the labour force. 
C) is incorrect as a person who has been temporarily laid off is still considered part of the labour force as they are available for work and actively seeking employment. 
D) is incorrect as a person who is out of a job and looking for work during the previous four weeks is considered to be part of the labour force.

Question 17

The GDP deflator is a:

Accepted Answer

The GDP deflator is a Paasche price index because it uses the current year's quantities as weights, allowing it to reflect the prices of goods and services in the current year's consumption basket.

Question 18

The labour-force participation rate is the percentage of the:

Accepted Answer

The labour-force participation rate measures the percentage of the adult population that is in the labour force, which includes those who are employed and those who are unemployed but actively seeking work. Therefore, option B is the correct answer. Option A refers only to those who are employed, while options C and D only refer to those in the labour force, which is a smaller subset of the adult population.

Question 19

Assume that the adult population of Canada is 28 million,total employment is 17 million,and 1 million are unemployed.Then the unemployment rate,as normally computed,is approximately ______ percent.

Accepted Answer

The answer of Assume that the adult population of Canada...

Question 20

The labour force equals the:

Accepted Answer

The labour force includes both employed and unemployed individuals who are actively seeking employment. Therefore, option D, which includes both the employed and unemployed individuals is the correct answer. Options A and B exclude unemployed individuals and option C excludes employed individuals, making them incorrect.

Quiz 2: The Data of Macroeconomics

If the unemployment rate is 6 percent and the number of employed is 24 million,then the labour force equals ______ million.

According to the Labour Force Survey,the number of jobs in Canada shrank by 7000 during the month of February 2014,yet the unemployment rate remained constant at 7%.It is likely that the unemployment rate was unaffected because:

The number of households interviewed in the monthly labour force survey conducted by Statistics Canada is approximately:

The CPI is a:

According to the definition used by Statistics Canada,people are considered to be unemployed if they:

If the number employed increases while the number unemployed does not change,the unemployment rate:

Unlike the GDP deflator,the CPI includes the prices of:

When prices of different goods are increasing by different amounts,the price index that will rise the fastest is:

An increase in the price of imported goods will show up in:

An increase in the price of goods bought by firms and the government will show up in:

Economists have estimated that the CPI inflation by approximately percentage point(s) per year.

If an increasing proportion of the adult population is retired,then the labour force participation rate:

Measuring the rate of inflation using a market basket that excludes food and energy prices is preferred by some analysts because this measure,called core inflation:

According to the definition used by Statistics Canada,a person is not in the labour force if that person:

The GDP deflator is a:

The labour-force participation rate is the percentage of the:

Assume that the adult population of Canada is 28 million,total employment is 17 million,and 1 million are unemployed.Then the unemployment rate,as normally computed,is approximately ______ percent.

The labour force equals the:

Quiz 2: The Data of Macroeconomics

If the unemployment rate is 6 percent and the number of employed is 24 million,then the labour force equals ______ million.

According to the Labour Force Survey,the number of jobs in Canada shrank by 7000 during the month of February 2014,yet the unemployment rate remained constant at 7%.It is likely that the unemployment rate was unaffected because:

The number of households interviewed in the monthly labour force survey conducted by Statistics Canada is approximately:

The CPI is a:

According to the definition used by Statistics Canada,people are considered to be unemployed if they:

If the number employed increases while the number unemployed does not change,the unemployment rate:

Unlike the GDP deflator,the CPI includes the prices of:

When prices of different goods are increasing by different amounts,the price index that will rise the fastest is:

An increase in the price of imported goods will show up in:

An increase in the price of goods bought by firms and the government will show up in:

Economists have estimated that the CPI ______ inflation by approximately ______ percentage point(s) per year.

If an increasing proportion of the adult population is retired,then the labour force participation rate:

Measuring the rate of inflation using a market basket that excludes food and energy prices is preferred by some analysts because this measure,called core inflation:

According to the definition used by Statistics Canada,a person is not in the labour force if that person:

The GDP deflator is a:

The labour-force participation rate is the percentage of the:

Assume that the adult population of Canada is 28 million,total employment is 17 million,and 1 million are unemployed.Then the unemployment rate,as normally computed,is approximately ______ percent.

The labour force equals the:

Economists have estimated that the CPI inflation by approximately percentage point(s) per year.