Question 1

Between 1967 and 1977 the price level approximately doubled.On the basis of this information we can say that the average annual rate of inflation over this ten-year period was about:

Accepted Answer

A)  10 percent.
B)  7 percent.
C)  4 percent.
D)  2 percent.E) A) and D)
F) A) and B)

Question 2

In which of the following industries or sectors of the economy is output likely to be most strongly affected by the business cycle?

Accepted Answer

A)  military goods
B)  durable goods (machinery, equipment, etc.) 
C)  textile products (clothing) 
D)  agricultural commodities (wheat, corn, etc.) E) A) and B)
F) All of the above

Question 3

Core inflation is the underlying inflation that exists when volatile food and energy prices are omitted.

Accepted Answer

A) True 
 B)False

Question 4

Part-time workers are counted as:

Accepted Answer

A)  unemployed and therefore the official unemployment rate tends to overstate the level of unemployment.
B)  unemployed and therefore the official unemployment rate tends to understate the level of unemployment.
C)  fully employed and therefore the official unemployment rate tends to overstate the level of unemployment.
D)  fully employed and therefore the official unemployment rate tends to understate the level of unemployment.E) A) and C)
F) C) and D)

Question 5

If the unemployment rate is 9 percent and the natural rate of unemployment is 7.5 percent, then the:

Accepted Answer

A)  frictional unemployment rate is 7.5 percent.
B)  cyclical unemployment rate and the frictional unemployment rate together are 7.5 percent.
C)  cyclical unemployment rate is 1.5 percent.
D)  natural rate of unemployment will eventually increase.E) A) and C)
F) A) and D)

Question 6

During a period of hyperinflation:

Accepted Answer

A)  debtors gain because they repay their debts with dollars of diminished value.
B)  people tend to hold goods rather than money.
C)  income is redistributed away from savers.
D)  all of these.E) A) and B)
F) All of the above

Question 7

Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called:

Accepted Answer

A)  frictional unemployment.
B)  structural unemployment.
C)  cyclical unemployment.
D)  compositional unemployment.E) B) and C)
F) A) and C)

Question 8

In recent years the Canadian unemployment rate has been lower than the rate in most of the European countries.

Accepted Answer

A) True 
 B)False

Question 9

In an economy, 35 million workers are employed out of a labour force of 50 million and a total population of 70 million.The unemployment rate is:

Accepted Answer

A)  15 percent.
B)  25 percent.
C)  50 percent.
D)  30 percent.E) None of the above
F) All of the above

Question 10

The unemployment rate of:

Accepted Answer

A)  women greatly exceeds that of men.
B)  retired persons is more than that of women.
C)  white-collar workers exceeds that of blue-collar workers.
D)  teenagers is much higher than that of adults.E) A) and B)
F) All of the above

Question 11

Which of the following is the phase that follows the recessionary phase of a business cycle?

Accepted Answer

A)  Trough
B)  Expansion
C)  Peak
D)  ContractionE) All of the above
F) C) and D)

Question 12

The descriptions give the responses of four individuals to Statistics Canada.1.Mollie just graduated from university and is now looking for work.She has had three job interviews in the past month.2.George works in an automotive assembly plant.He was laid off six months ago as the economy weakened.He expects to return to work in several months when national economic conditions improve.3.Jeanette worked as an aircraft design engineer for a company that produces military aircraft until she lost her job last year when the federal government cut defence spending.She has been looking for similar work for a year but no company seems interested in her aircraft design skills.4.Ryan lost his job last year when his company downsized and laid off middle-level managers.He tried to find another job for a year, but was unsuccessful and quit looking for work.Refer to the above information.Which individual is cyclically unemployed?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) All of the above
F) A) and B)

Question 13

The official unemployment rate:

Accepted Answer

A)  involves people over 15 years of age who are not currently seeking employment.
B)  is the ratio of unemployed to employed workers.
C)  is the percentage of the labour force which is unemployed.
D)  is the percentage of the total population which is not working.E) A) and D)
F) A) and C)

Question 14

When the Canadian economy has achieved "full employment," the unemployment rate is at or below:

Accepted Answer

A)  7 percent.
B)  4.0 percent.
C)  3.3 percent.
D)  2.5 percent.E) B) and C)
F) C) and D)

Question 15

A headline reads: "Steel industry suffers slump as import competition increases and unemployment rises." This type of unemployment can best be characterized in economic terms as:

Accepted Answer

A)  frictional.
B)  structural.
C)  cyclical.
D)  natural.E) All of the above
F) A) and C)

Question 16

If the total population is 175 million, the labour force is 100 million, and 89 million workers are employed, then the unemployment rate is 11 percent.

Accepted Answer

A) True 
 B)False

Question 17

If the average level of nominal income in a nation is $44,000 and the price level index is 175, the average real income would be about:

Accepted Answer

A)  $18,857
B)  $25,143
C)  $44,000
D)  $77,000E) A) and B)
F) A) and C)

Question 18

Unanticipated inflation benefits creditors and savers.

Accepted Answer

A) True 
 B)False

Question 19

Inflation means:

Accepted Answer

A)  all prices are rising, but at different rates.
B)  all prices are rising and at the same rate.
C)  each unit of a currency (such as Canadian dollar)  buys more goods and services.
D)  the continual rise in the general level of prices.E) None of the above
F) A) and D)

Question 20

The Canadian economy is said to be producing its non-inflationary potential level of GDP when the natural rate of unemployment is:

Accepted Answer

A)  10-15 percent.
B)  7-10 percent.
C)  6-7 percent.
D)  2.3 percent.E) B) and C)
F) All of the above

Exam 9: Part B: Business Cycles, Unemployment, and Inflation

In an economy, 35 million workers are employed out of a labour force of 50 million and a total population of 70 million.The unemployment rate is:

Correct Answer
verified

If the total population is 175 million, the labour force is 100 million, and 89 million workers are employed, then the unemployment rate is 11 percent.

Correct Answer
verified

The Canadian economy is said to be producing its non-inflationary potential level of GDP when the natural rate of unemployment is:

Correct Answer
verified

In recent years the Canadian unemployment rate has been lower than the rate in most of the European countries.

Correct Answer
verified

During a period of hyperinflation:

Correct Answer
verified

In which of the following industries or sectors of the economy is output likely to be most strongly affected by the business cycle?

Correct Answer
verified

Inflation means:

Correct Answer
verified

Which of the following is the phase that follows the recessionary phase of a business cycle?

Correct Answer
verified

If the unemployment rate is 9 percent and the natural rate of unemployment is 7.5 percent, then the:

Correct Answer
verified

When the Canadian economy has achieved "full employment," the unemployment rate is at or below:

Correct Answer
verified

Unanticipated inflation benefits creditors and savers.

Correct Answer
verified

If the average level of nominal income in a nation is $44,000 and the price level index is 175, the average real income would be about:

Correct Answer
verified

The official unemployment rate:

Correct Answer
verified

Core inflation is the underlying inflation that exists when volatile food and energy prices are omitted.

Correct Answer
verified

Between 1967 and 1977 the price level approximately doubled.On the basis of this information we can say that the average annual rate of inflation over this ten-year period was about:

Correct Answer
verified

Correct Answer
verified

Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called:

Correct Answer
verified

Part-time workers are counted as:

Correct Answer
verified

The unemployment rate of:

Correct Answer
verified

A headline reads: "Steel industry suffers slump as import competition increases and unemployment rises." This type of unemployment can best be characterized in economic terms as:

Correct Answer
verified

Exam 9: Part B: Business Cycles, Unemployment, and Inflation

In an economy, 35 million workers are employed out of a labour force of 50 million and a total population of 70 million.The unemployment rate is:

Correct AnswerverifiedShow Answer

If the total population is 175 million, the labour force is 100 million, and 89 million workers are employed, then the unemployment rate is 11 percent.

Correct AnswerverifiedShow Answer

The Canadian economy is said to be producing its non-inflationary potential level of GDP when the natural rate of unemployment is:

Correct AnswerverifiedShow Answer

In recent years the Canadian unemployment rate has been lower than the rate in most of the European countries.

Correct AnswerverifiedShow Answer

During a period of hyperinflation:

Correct AnswerverifiedShow Answer

In which of the following industries or sectors of the economy is output likely to be most strongly affected by the business cycle?

Correct AnswerverifiedShow Answer

Inflation means:

Correct AnswerverifiedShow Answer

Which of the following is the phase that follows the recessionary phase of a business cycle?

Correct AnswerverifiedShow Answer

If the unemployment rate is 9 percent and the natural rate of unemployment is 7.5 percent, then the:

Correct AnswerverifiedShow Answer

When the Canadian economy has achieved "full employment," the unemployment rate is at or below:

Correct AnswerverifiedShow Answer

Unanticipated inflation benefits creditors and savers.

Correct AnswerverifiedShow Answer

If the average level of nominal income in a nation is $44,000 and the price level index is 175, the average real income would be about:

Correct AnswerverifiedShow Answer

The official unemployment rate:

Correct AnswerverifiedShow Answer

Core inflation is the underlying inflation that exists when volatile food and energy prices are omitted.

Correct AnswerverifiedShow Answer

Between 1967 and 1977 the price level approximately doubled.On the basis of this information we can say that the average annual rate of inflation over this ten-year period was about:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Unemployment involving a mismatch of the skills of unemployed workers and the skills required for available jobs is called:

Correct AnswerverifiedShow Answer

Part-time workers are counted as:

Correct AnswerverifiedShow Answer

The unemployment rate of:

Correct AnswerverifiedShow Answer

A headline reads: "Steel industry suffers slump as import competition increases and unemployment rises." This type of unemployment can best be characterized in economic terms as:

Correct AnswerverifiedShow Answer

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