Question 1

The following people are currently out of work: Aimee, who is actively looking for a job; Ken, who is not looking for a job because he doesn't think he could find one; Alex who is working part-time but is looking for full-time work; and Ian, who is not looking for a job because he takes care of his twin sons. Who does Statistics Canada consider to be unemployed?

Accepted Answer

A)   Aimee
B)   Ken
C)   Alex
D)   IanE) C) and D)
F) A) and C)

Question 2

Frictional unemployment exists because of the time it takes for workers to search for the jobs that best suit their tastes and skills.

Accepted Answer

A) True 
 B)False

Question 3

Nancy is searching for a job that suits her tastes about where to live and the people she works with. Laura is looking for a job that makes best use of her skills. Which statement best describes the nature of Nancy and Laura's unemployment?

Accepted Answer

A)   Nancy and Laura are both frictionally unemployed.
B)   Nancy and Laura are both structurally unemployed.
C)   Nancy is frictionally unemployed, and Laura is structurally unemployed.
D)   Nancy is structurally unemployed, and Laura is frictionally unemployed.E) A) and B)
F) A) and C)

Question 4

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Accepted Answer

Standard economic theory suggests that i...

Question 5

Some people are unemployed because they are searching for a very specific job. How are these people best classified?

Accepted Answer

A)   as cyclically unemployed
B)   as structurally unemployed
C)   as frictionally unemployed
D)   as discouraged workersE) C) and D)
F) A) and D)

Question 6

Union workers earn about 10 percent to 20 percent more than similar workers who do not belong to unions.

Accepted Answer

A) True 
 B)False

Question 7

What does cyclical unemployment refer to?

Accepted Answer

A)   the relation between the probability of unemployment and a worker's years of experience
B)   how often a worker is likely to be unemployed during her lifetime
C)   year-to-year fluctuations of unemployment around its natural rate
D)   long-term trends in unemploymentE) C) and D)
F) B) and C)

Question 8

Meredith is looking for work as a computer programmer. Although her prospects are good, she hasn't yet taken a job. Julie is looking for work in a steel mill, but there aren't many job ads for steel workers and every time she shows up for an interview, there are many more people than openings. Which statement best describes the nature of their unemployment?

Accepted Answer

A)   Meredith and Julie are both frictionally unemployed.
B)   Meredith and Julie are both structurally unemployed.
C)   Meredith is frictionally unemployed, and Julie is structurally unemployed.
D)   Meredith is structurally unemployed, and Julie is frictionally unemployed.E) None of the above
F) B) and C)

Question 9

Figure 9-2 
-Refer to Figure 9-2. If the minimum wage rose from $5 to $7, what would happen to unemployment?

Accepted Answer

A)   It would rise by 40.
B)   It would rise by 20.
C)   It would fall by 20.
D)   It would fall by 40.E) None of the above
F) A) and B)

Question 10

In Canada in recent years, how does the unemployment rate among those aged 15 to 24 compare with that of older adults?

Accepted Answer

A)   less than that of older adults
B)   about the same as that of older adults
C)   much higher than that of older adults
D)   approximately half that of older adultsE) C) and D)
F) A) and B)

Question 11

How do sectoral shifts in the economy affect unemployment?

Accepted Answer

A)   They create structural unemployment.
B)   They reduce unemployment.
C)   They increase unemployment due to job search.
D)   Overall, they leave unemployment unchanged.E) B) and C)
F) All of the above

Question 12

How is Rachel, a stay-at-home parent who works as a volunteer at the local Canadian Cancer Society office and is currently not looking for a job, counted?

Accepted Answer

A)   as employed and in the labour force
B)   as unemployed and in the labour force
C)   as unemployed and not in the labour force
D)   as not in the labour forceE) All of the above
F) B) and C)

Question 13

What is the theory of efficiency wages? Give a couple of explanations for how efficiency wages might work.

Accepted Answer

According to the theory of efficiency wa...

Question 14

Why was the 2009 recession also referred to as a "mancession"?

Accepted Answer

A)   it affected only manufacturing jobs
B)   it increased male unemployment much more than female unemployment
C)   it was very well managed by the government
D)   it was considered to be a manageable downturn faced by retailersE) C) and D)
F) A) and D)

Question 15

Employment insurance reduces hardships of unemployment but also increases the amount of structural unemployment.

Accepted Answer

A) True 
 B)False

Question 16

What is characteristic of the relationship between unemployment insurance and job-search effort?

Accepted Answer

A)   Unemployment insurance raises structural unemployment because it reduces the job search of the unemployed.
B)   Most economists are sceptical of the value of unemployment insurance because they believe that it results in a poorer match between workers and jobs.
C)   A typical unemployed worker near the end of the time in which he or she can receive benefits increases job-search efforts.
D)   Unemployed people need to put less job-search effort now than they did in 1971 because in 1971 the conditions to receive unemployment benefits were stricter than today.E) A) and D)
F) B) and C)

Question 17

Suppose that in some country neither textile workers nor shoemakers are unionized. If textile workers unionize and so are able to raise their wages, what will most likely happen to shoemakers?

Accepted Answer

A)   The demand for shoemakers will rise, and their wages will rise.
B)   The demand for shoemakers will fall, and their wages will fall.
C)   The supply of shoemakers will rise, and their wages will fall.
D)   The supply of shoemakers will fall, and their wages will rise.E) A) and D)
F) B) and C)

Question 18

Suppose that consumers decide to buy more 4K players and fewer Blu-Ray players. As a result, 4K companies expand production while Blu-Ray companies lay off workers. What is this an example of?

Accepted Answer

A)   structural unemployment created by efficiency wages
B)   cyclical unemployment created by a recession
C)   frictional unemployment created by a sectoral shift in demand
D)   frictional unemployment created by a sectoral shift in supplyE) B) and C)
F) A) and C)

Question 19

Firms might offer efficiency wages in order to attract a better pool of applicants.

Accepted Answer

A) True 
 B)False

Question 20

How is the labour-force participation rate computed?

Accepted Answer

A)   as the number of adults in the labour force divided by the adult population times 100
B)   as the number of adults in the labour force divided by the number of unemployed times 100
C)   as the number of adults in the labour force divided by the unemployment rate times 100
D)   as the number of adults in the labour force times the participation rate times 100E) C) and D)
F) None of the above

Exam 9: Unemployment and Its Natural Rate

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Correct Answer
verified
Standard economic theory suggests that i...
View Answer

Some people are unemployed because they are searching for a very specific job. How are these people best classified?

Correct Answer
verified

Suppose that consumers decide to buy more 4K players and fewer Blu-Ray players. As a result, 4K companies expand production while Blu-Ray companies lay off workers. What is this an example of?

Correct Answer
verified

Why was the 2009 recession also referred to as a "mancession"?

Correct Answer
verified

What is characteristic of the relationship between unemployment insurance and job-search effort?

Correct Answer
verified

How do sectoral shifts in the economy affect unemployment?

Correct Answer
verified

How is the labour-force participation rate computed?

Correct Answer
verified

What does cyclical unemployment refer to?

Correct Answer
verified

What is the theory of efficiency wages? Give a couple of explanations for how efficiency wages might work.

Correct Answer
verified
According to the theory of efficiency wa...
View Answer

Union workers earn about 10 percent to 20 percent more than similar workers who do not belong to unions.

Correct Answer
verified

Employment insurance reduces hardships of unemployment but also increases the amount of structural unemployment.

Correct Answer
verified

Firms might offer efficiency wages in order to attract a better pool of applicants.

Correct Answer
verified

Frictional unemployment exists because of the time it takes for workers to search for the jobs that best suit their tastes and skills.

Correct Answer
verified

How is Rachel, a stay-at-home parent who works as a volunteer at the local Canadian Cancer Society office and is currently not looking for a job, counted?

Correct Answer
verified

In Canada in recent years, how does the unemployment rate among those aged 15 to 24 compare with that of older adults?

Correct Answer
verified

Correct Answer
verified

Figure 9-2 -Refer to Figure 9-2. If the minimum wage rose from $5 to $7, what would happen to unemployment?

Correct Answer
verified

Suppose that in some country neither textile workers nor shoemakers are unionized. If textile workers unionize and so are able to raise their wages, what will most likely happen to shoemakers?

Correct Answer
verified

Nancy is searching for a job that suits her tastes about where to live and the people she works with. Laura is looking for a job that makes best use of her skills. Which statement best describes the nature of Nancy and Laura's unemployment?

Correct Answer
verified

Correct Answer
verified

Exam 9: Unemployment and Its Natural Rate

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Correct AnswerverifiedStandard economic theory suggests that i...View AnswerShow Answer

Some people are unemployed because they are searching for a very specific job. How are these people best classified?

Correct AnswerverifiedShow Answer

Suppose that consumers decide to buy more 4K players and fewer Blu-Ray players. As a result, 4K companies expand production while Blu-Ray companies lay off workers. What is this an example of?

Correct AnswerverifiedShow Answer

Why was the 2009 recession also referred to as a "mancession"?

Correct AnswerverifiedShow Answer

What is characteristic of the relationship between unemployment insurance and job-search effort?

Correct AnswerverifiedShow Answer

How do sectoral shifts in the economy affect unemployment?

Correct AnswerverifiedShow Answer

How is the labour-force participation rate computed?

Correct AnswerverifiedShow Answer

What does cyclical unemployment refer to?

Correct AnswerverifiedShow Answer

What is the theory of efficiency wages? Give a couple of explanations for how efficiency wages might work.

Correct AnswerverifiedAccording to the theory of efficiency wa...View AnswerShow Answer

Union workers earn about 10 percent to 20 percent more than similar workers who do not belong to unions.

Correct AnswerverifiedShow Answer

Employment insurance reduces hardships of unemployment but also increases the amount of structural unemployment.

Correct AnswerverifiedShow Answer

Firms might offer efficiency wages in order to attract a better pool of applicants.

Correct AnswerverifiedShow Answer

Frictional unemployment exists because of the time it takes for workers to search for the jobs that best suit their tastes and skills.

Correct AnswerverifiedShow Answer

How is Rachel, a stay-at-home parent who works as a volunteer at the local Canadian Cancer Society office and is currently not looking for a job, counted?

Correct AnswerverifiedShow Answer

In Canada in recent years, how does the unemployment rate among those aged 15 to 24 compare with that of older adults?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 9-2 -Refer to Figure 9-2. If the minimum wage rose from $5 to $7, what would happen to unemployment?

Correct AnswerverifiedShow Answer

Suppose that in some country neither textile workers nor shoemakers are unionized. If textile workers unionize and so are able to raise their wages, what will most likely happen to shoemakers?

Correct AnswerverifiedShow Answer

Nancy is searching for a job that suits her tastes about where to live and the people she works with. Laura is looking for a job that makes best use of her skills. Which statement best describes the nature of Nancy and Laura's unemployment?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified
Standard economic theory suggests that i...
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
According to the theory of efficiency wa...
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