Question 1

-Refer to the information above to answer this question.What is the value of the GDP deflator in 2015?

Accepted Answer

A)  52.2
B)  61.8
C)  84.4
D)  100
E)  118.0F) None of the above
G) C) and D)

Question 2

Which of the following statements concerning the natural rate of unemployment is incorrect?

Accepted Answer

A)  It is made up of both frictional and structural unemployment.
B)  It is the rate of unemployment at full employment.
C)  It is when the total number of job vacancies equals the number of people unemployed.
D)  It is probably about 5% to 7% in Canada today.
E)  It is when both frictional and structural unemployment is zero.F) A) and B)
G) C) and E)

Question 3

"If there is an increase in current market prices there will be an increase in nominal GDP." Evaluate this statement

Accepted Answer

If real GDP remains the same,yes.However...

Question 4

Both male and female participation rates in Canada have been steadily rising for the past 20 years.

Accepted Answer

A) True 
 B)False

Question 5

What is the natural rate of unemployment?

Accepted Answer

A)  The unemployment rate experienced at the depth of a depression.
B)  The full-employment unemployment rate.
C)  The unemployment caused by frictional unemployment only.
D)  The unemployment caused by structural unemployment only.
E)  The amount of cyclical unemployment in an economy when frictional and structural unemployment are both zero.F) A) and B)
G) C) and D)

Question 6

If the annual inflation rate is 7 percent,then the price level will double in ten years.

Accepted Answer

A) True 
 B)False

Question 7

Suppose that Jim's income in year 1 was $45,000.Over the next four years,his income increases by 5 percent per year.At the same time,the economy experiences an inflation rate of 2 percent per year.At the end of four years,what will be Jim's real income?

Accepted Answer

$45,000

3% = 46,350

3% = 47,741

3% = ...

Question 8

How does StatsCan define a recession?

Accepted Answer

A)  A decline in real GDP during one quarter.
B)  A decline in real GDP over two consecutive quarters.
C)  An unemployment rate in excess of 8% along with a decline in GDP.
D)  A decline in nominal GDP over one quarter.
E)  An unemployment rate in excess of 8%.F) B) and E)
G) A) and D)

Question 9

What would be the effect of 50,000 unemployed people becoming discouraged workers?

Accepted Answer

A)  The unemployment rate would remain unchanged,and the size of the labour force would decline.
B)  Both the unemployment rate and the size of the labour force would decline.
C)  The unemployment rate would decline,and the size of the labour force would remain unchanged.
D)  Both the unemployment rate and the size of the labour force size would rise.E) B) and D)
F) C) and D)

Question 10

According to most economists,presently,what is the natural rate of unemployment in Canada?

Accepted Answer

A)  1% - 2%.
B)  2% - 3%.
C)  5% - 7%.
D)  10%.
E)  12% - 15%.F) All of the above
G) B) and D)

Question 11

Assume that between 2005 and 2015 the price level doubled.What is the approximate average annual rate of inflation over this ten-year period?

Accepted Answer

A)  10%
B)  7%
C)  5%
D)  2%
E)  1%F) B) and E)
G) All of the above

Question 12

The real interest rate is equal to the nominal interest rate plus the expected inflation rate.

Accepted Answer

A) True 
 B)False

Question 13

What is Okun's Law?

Accepted Answer

A)  It measures the trade-off between the rate of inflation and the rate of unemployment.
B)  It indicates the number of years it will take for any amount to double if compounded at a constant rate.
C)  It quantifies the relationship between nominal and real incomes.
D)  It shows the relationship between cyclical unemployment and the size of the GDP gap.
E)  It states that supply creates its own demand.F) B) and E)
G) A) and E)

Question 14

Frictional unemployment is likely to be greatest in sunset industries.

Accepted Answer

A) True 
 B)False

Question 15

What would happen to the unemployment rate if it was not seasonally adjusted?

Accepted Answer

A)  It would not differ from seasonally adjusted rates.
B)  It would move in direct proportion to the business cycle.
C)  Nothing since it is the normal way StatsCan reports unemployment.
D)  It would normally rise in the winter and fall in the summer.E) A) and C)
F) B) and C)

Question 16

Which of the following categories would a thirty-five-year-old,healthy male who does not work because he has inherited a large fortune most likely fall into?

Accepted Answer

A)  In the labour force.
B)  In the working age population.
C)  Employed.
D)  Unemployed.E) A) and B)
F) None of the above

Question 17

Which of the following is true of official unemployment statistics?

Accepted Answer

A)  They tend to understate the real amount of unemployment because individuals receiving unemployment benefits are counted as employed.
B)  They tend to understate the real amount of unemployment because "discouraged workers" are not counted as unemployed.
C)  They include both frictional and structural unemployment,but not cyclical unemployment.
D)  They tend to overstate the real amount of unemployment because workers who are involuntarily working part-time are counted as being employed.
E)  They tend to understate the real amount of unemployment because many people in the underground economy declare themselves unemployed whereas they are actually fully employed.F) A) and E)
G) A) and D)

Question 18

For which of the following factors of production can the concept of unemployment be applied?

Accepted Answer

A)  Labour
B)  Land and labour
C)  Capital and labour
D)  Land and capital
E)  Land,labour and capitalF) A) and B)
G) A) and C)

Question 19

Nominal output has increased from $600 billion to $720 billion.The GDP deflator has risen by 10%.By what dollar amount has real output risen?

Accepted Answer

Use the formula real output = ...

Question 20

What type of unemployment is associated with recessions?

Accepted Answer

A)  Seasonal.
B)  Structural.
C)  Cyclical.
D)  Natural.
E)  Search.F) A) and B)
G) A) and C)

Exam 4: Measuring the Economy 2: Unemployment and Inflation

Which of the following categories would a thirty-five-year-old,healthy male who does not work because he has inherited a large fortune most likely fall into?

Correct AnswerverifiedShow Answer

Suppose that Jim's income in year 1 was $45,000.Over the next four years,his income increases by 5 percent per year.At the same time,the economy experiences an inflation rate of 2 percent per year.At the end of four years,what will be Jim's real income?

Correct Answerverified$45,000 3% = 46,350 3% = 47,741 3% = ...View AnswerShow Answer

Which of the following statements concerning the natural rate of unemployment is incorrect?

Correct AnswerverifiedShow Answer

What is the natural rate of unemployment?

Correct AnswerverifiedShow Answer

"If there is an increase in current market prices there will be an increase in nominal GDP." Evaluate this statement

Correct AnswerverifiedIf real GDP remains the same,yes.However...View AnswerShow Answer

Frictional unemployment is likely to be greatest in sunset industries.

Correct AnswerverifiedShow Answer

According to most economists,presently,what is the natural rate of unemployment in Canada?

Correct AnswerverifiedShow Answer

If the annual inflation rate is 7 percent,then the price level will double in ten years.

Correct AnswerverifiedShow Answer

What would happen to the unemployment rate if it was not seasonally adjusted?

Correct AnswerverifiedShow Answer

For which of the following factors of production can the concept of unemployment be applied?

Correct AnswerverifiedShow Answer

Assume that between 2005 and 2015 the price level doubled.What is the approximate average annual rate of inflation over this ten-year period?

Correct AnswerverifiedShow Answer

Which of the following is true of official unemployment statistics?

Correct AnswerverifiedShow Answer

-Refer to the information above to answer this question.What is the value of the GDP deflator in 2015?

Correct AnswerverifiedShow Answer

The real interest rate is equal to the nominal interest rate plus the expected inflation rate.

Correct AnswerverifiedShow Answer

Both male and female participation rates in Canada have been steadily rising for the past 20 years.

Correct AnswerverifiedShow Answer

Nominal output has increased from $600 billion to $720 billion.The GDP deflator has risen by 10%.By what dollar amount has real output risen?

Correct AnswerverifiedUse the formula real output = ...View AnswerShow Answer

What is Okun's Law?

Correct AnswerverifiedShow Answer

How does StatsCan define a recession?

Correct AnswerverifiedShow Answer

What would be the effect of 50,000 unemployed people becoming discouraged workers?

Correct AnswerverifiedShow Answer

What type of unemployment is associated with recessions?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
$45,000 3% = 46,350 3% = 47,741 3% = ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
If real GDP remains the same,yes.However...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Use the formula real output = ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified