Chapter 9 Unemployment and Its Natural Rate PDF

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Chapter 9 - Unemployment and Its Natural Rate 1. Which statement best defines the natural rate of unemployment? a. It is the unemployment rate that would prevail with zero immigration. b. It is the rate associated with the highest possible level of GDP. c. It is the difference between long-run and short-run unemployment rates. d. It is the amount of unemployment that the economy normally experiences. ANSWER: d 2. What does cyclical unemployment refer to? 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 unemployment ANSWER: c 3. What is cyclical unemployment closely associated with? a. long-term economic growth b. short-run ups and downs of the economy c. fluctuations in the natural rate of unemployment d. seasonal fluctuations in spending ANSWER: b 4. Which statement is characteristic of the natural rate of unemployment? a. It is a consistent rate, year after year. b. It is the desirable rate of unemployment. c. It is a variable that cannot be altered by economic policy. d. It is the amount of unemployment that the economy normally experiences. ANSWER: d 5. Which statement best explains how unemployment relates to business cycles? a. Unemployment can be eliminated through economic policies when the economy grows at normal rates. b. Unemployment only exists during periods of economic slowdown. c. Cyclical unemployment is inversely related to short-run economic fluctuations. d. Unemployment is unrelated to short-run economic fluctuations. ANSWER: c 6. How often is data on unemployment reported? a. weekly b. monthl y c. quarterl d. yearly Copyright Cengage Learning. Powered by Cognero.

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Chapter 9 - Unemployment and Its Natural Rate y ANSWER: b 7. Which data does Statistics Canada NOT produce? a. monthly data on unemployment b. data on types of employment d. daily data on unemployment c. data on length of the average workweek ANSWER: d 8. How is the unemployment rate computed? a. by counting the number of employment insurance applications filed b. by dividing the number of unemployed by the number of persons in the labour force c. by determining the number of unemployed in the population aged 18 and older d. by counting the number of working-age persons who don’t have a job ANSWER: b 9. How is unemployment data collected? a. from employment insurance applications b. through a regular survey of about 54,000 households c. through a regular survey of about 200,000 firms d. using Canada Revenue Agency tax files ANSWER: b 10. Which of the following lists includes all the categories into which Statistics Canada divides the adult population? a. employed, unemployed b. discouraged workers, employed, unemployed c. employed, unemployed, not in the labour force d. discouraged workers, employed, not in the labour force ANSWER: c 11. Which of the following constitutes the labour force? a. the number of people who are employed b. the number of people who are unemployed c. the number of people employed plus the number of people unemployed d. the number of people in the adult population ANSWER: c 12. Who would be counted as unemployed according to official statistics? a. Javier, who is currently not working and is waiting for his new job to start b. Julia, who worked only 10 hours last week Copyright Cengage Learning. Powered by Cognero.

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Chapter 9 - Unemployment and Its Natural Rate c. Shep, who has just graduated from university and is taking a year off to volunteer abroad d. Roseanne, who has retired and is not looking for work ANSWER: a 13. Who would be counted as unemployed according to official statistics? a. Joao, a full-time student who is not looking for work b. Poppy, who is waiting to be recalled after a temporary layoff c. Rick, who has recently retired d. Brendan, who neither has a job nor is looking for one ANSWER: b 14. Who would NOT be included in the labour force? a. David, who is on temporary layoff b. Cam, who won the lottery and is not looking for work c. Jane, who does not have a job, but has applied for several in the past week d. Makena, who has a part-time job but is looking for a full-time one ANSWER: b 15. Who would be included in the labour force? a. Jeremiah, who plans to travel for a few months before looking for work b. Kaylin, a full-time student not looking for work c. Caroline, who does not have a job but is looking for work d. Rebecca, who has interrupted her career to raise her two children ANSWER: c 16. Who would NOT be included in the labour force? a. Krista, who works most of the week in a distribution centre b. Beth, who is waiting for her new job at the hostel to start c. Dave, who does not have a job, but is looking for work d. Holly, who, instead of being paid, cares for children in exchange for room and board ANSWER: d 17. Who would be included in the labour force? a. Hank, who is waiting for his new job to start b. Ken, who has become discouraged looking for a job and has quit looking for a while c. Homer, an unpaid stay-at-home parent d. Thomas, a 20-year-old student who does not work and is not looking for work ANSWER: a 18. Ed is on a temporary winter layoff from the canal system where he works as a lock master. If Ed participates in the Copyright Cengage Learning. Powered by Cognero.

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Chapter 9 - Unemployment and Its Natural Rate Statistics Canada survey, how will he be classified? a. as unemployed and in the labour force b. as unemployed and out of the labour force c. as employed and in the labour force d. as employed and out of the labour force ANSWER: a 19. Which statement ranks categories from smallest to largest according to recent Canadian statistics? a. unemployed, employed, not in labour force b. unemployed, not in labour force, employed c. not in labour force, employed, unemployed d. not in labour force, unemployed, employed ANSWER: b 20. In which situation would Statistics Canada count a person as unemployed? a. when that person is not in the labour force b. when that person is not looking for work c. when that person is under the age of 15 d. when that person is age 15 or over and looking for work ANSWER: d 21. How is a college student who is not working or looking for a job counted? a. as neither employed nor part of the labour force b. as unemployed and in the labour force c. as unemployed, but not in the labour force d. as employed and in the labour force ANSWER: a 22. 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? a. as employed and in the labour force b. as unemployed and in the labour force d. as not in the labour force c. as unemployed and not in the labour force ANSWER: d 23. How does Statistics Canada define the unemployment rate? a. as the percentage of those unemployed relative to the percentage employed Copyright Cengage Learning. Powered by Cognero.

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Chapter 9 - Unemployment and Its Natural Rate b. as the percentage of the labour force that is unemployed c. as the percentage of the adult population that is unemployed d. as the percentage of the labour force without full-time employment ANSWER: b 24. How is the unemployment rate computed? a. as the number of unemployed divided by the labour force times 100 b. as the number of unemployed divided by the number of people employed times 100 c. as the number of unemployed divided by the adult population times 100 d. as the number of unemployed times the participation rate times 100 ANSWER: a 25. Which of the following best defines the labour force? a. the number of employed b. the population minus the number of unemployed c. the population aged 15 or over d. the number of unemployed plus the number of employed ANSWER: d 26. What does the labour-force participation rate measure? a. the percentage of the total adult population that is in the labour force b. the percentage of the total adult population that is employed c. the percentage of the labour force that is employed d. the percentage of the labour force that is either employed or unemployed ANSWER: a 27. How is the labour-force participation rate defined? a. (Employed ÷ Adult population) × 100 b. (Employed ÷ Labour force) × 100 d. (Adult population ÷ Labour force) × c. (Labour force ÷ Adult population) × 100 100 ANSWER: c 28. How is the labour-force participation rate computed? 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 100 ANSWER: a Copyright Cengage Learning. Powered by Cognero.

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Chapter 9 - Unemployment and Its Natural Rate 29. A foreign governmental statistics agency recently reported that there were 37.6 million people over age 25 who had at least a bachelor’s degree. Of this number, 28.0 million were in the labour force and 25.9 million were employed. What was the unemployment rate in this group? b. about 7.5 percent a. about 5.6 percent c. about 7.7 d. about 31.1 percent percent ANSWER: b 30. In 2019 in Japan, based on concepts similar to those used to compute Canadian employment statistics, the unemployment rate was about 4.4 percent, the labour force participation rate was about 60 percent, and the adult population was about 130 million. How many people were employed? a. about 5.7 million b. about 64.0 million d. about 124.3 million c. about 74.6 million ANSWER: c 31. In 2019 in the United Kingdom, the adult population was about 65 million, the labour force participation rate was 60 percent, and the unemployment rate was 6 percent. What was the approximate number of people unemployed? a. 0.7 million b. 1.7 million c. 2.3 million d. 6.5 million ANSWER: c 32. Rick loses his job and immediately begins looking for another. Other things equal, what happens to the unemployment rate? a. The unemployment rate decreases because he is not in the labour force anymore. b. The unemployment rate increases because he is still in the labour force. c. The unemployment rate decreases because he is still in the labour force. d. The unemployment rate increases because he is not in the labour force anymore. ANSWER: b 33. Geoff loses his job in May and decides to spend his summer fishing. Assuming that other things remain the same, what happens to the unemployment rate? a. The unemployment rate decreases because he is not in the labour force anymore. b. The unemployment rate increases because he is still in the labour force. c. The unemployment rate decreases because he is still in the labour force. d. The unemployment rate increases because he is not in the labour force anymore. ANSWER: a 34. Rebecca’s contract position with Elections Canada ended after the federal election. She is now looking for another job, but has not yet found one. Which pair of categories does Rebecca now belong to? b. unemployed and in the labour a. unemployed and not in the labour force force Copyright Cengage Learning. Powered by Cognero.

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Chapter 9 - Unemployment and Its Natural Rate c. employed and not in the labour force ANSWER: b

d. employed and in the labour force

35. Tara has just finished school, but she is going to roam around the country awhile before she starts looking for work. Which statement best characterizes the changes that occur in labour statistics? a. The unemployment rate increases, and the labour-force participation rate increases. b. The unemployment rate is unaffected, and the labour-force participation rate is unaffected. c. The unemployment rate increases, and the labour-force participation rate decreases. d. The unemployment rate increases, and the labour-force participation rate is unaffected. ANSWER: b 36. Last year, a government reported an increase in the number of people who were employed and an increase in the unemployment rate. Which statement would best explain the report? a. There was an increase in labour force. b. There was a decrease in labour force. c. There was an increase in adult population. d. There was a decrease in adult population. ANSWER: a 37. Prime Minister Bigego is running for re-election against Finance Minister Pander. Bigego proclaims that more people are working now than when he took office. Pander says that the unemployment rate is higher now than when Bigego took office. What can you conclude? a. Both of them could be telling the truth if the labour-force participation rate and the labour force both grew. b. Both of them could be telling the truth if the labour-force participation rate and the labour force both fell. c. Both of them could be telling the truth if the labour force grew slower than employment. d. Both of them could be telling the truth if the labour force grew faster than employment. ANSWER: d Table 9-1 This table shows the 2019 data for males and females aged 15 and over in the country of Bolivar. Not in the Labour Force Male Female 45 million 35 million

Unemployed Male Female 5 million 5 million

Employed Male Female 85 million 65 million

38. Refer to Table 9-1. What is the adult population in Bolivar? a. 90 million b. 160 million c. 2300 million d. 240 million ANSWER: d Copyright Cengage Learning. Powered by Cognero.

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Chapter 9 - Unemployment and Its Natural Rate 39. Refer to Table 9-1. What is the adult labour force in Bolivar? a. 150 million b. 160 million c. 230 million d. 240 million ANSWER: b 40. Refer to Table 9-1. What is the adult unemployment rate in Bolivar? a. 5.55 b. 6.25 percent percent d. 37.5 c. 6.67 percent percent ANSWER: b 41. Refer to Table 9-1. What is the adult labour-force participation rate in Bolivar? a. 6.3 percent b. 33.3 percent c. 62.5 d. 66.7 percent percent ANSWER: d 42. Refer to Table 9-1. What is the adult female population in Bolivar? a. 40 million b. 70 million c. 100 million d. 105 million ANSWER: d 43. Refer to Table 9-1. What is the adult male population in Bolivar? a. 85 million b. 90 million c. 130 million d. 135 million ANSWER: d 44. Refer to Table 9-1. What is the adult female labour force in Bolivar? a. 40 million b. 70 million c. 100 million d. 105 million ANSWER: b 45. Refer to Table 9-1. What is the adult male labour force in Bolivar? a. 85 million b. 90 million c. 130 million d. 135 million ANSWER: b 46. Refer to Table 9-1. What is the adult female unemployment rate in Bolivar? a. 4.76 b. 5.00 percent percent d. 8.33 c. 7.14 percent percent Copyright Cengage Learning. Powered by Cognero.

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Chapter 9 - Unemployment and Its Natural Rate ANSWER: c 47. Refer to Table 9-1. What is the adult male unemployment rate in Bolivar? a. 3.84 b. 5.56 percent percent d. 10.00 c. 5.88 percent percent ANSWER: b 48. Refer to Table 9-1. What is the adult female labour-force participation rate in Bolivar? a. 4.76 percent b. 33.33 percent d. 66.67 percent c. 61.90 percent ANSWER: d 49. Refer to Table 9-1. What is the adult male labour-force participation rate in Bolivar? a. 3.70 percent b. 33.33 percent d. 66.67 percent c. 50.00 percent ANSWER: d 50. Which group has the highest labour-force participation rate in Canada? b. males, 15–24 years a. females, 15–24 years d. males, 25–44 years c. females, 25–44 years ANSWER: d 51. Which group has the highest unemployment rate in Canada? b. males, 45–64 years a. females, 45–64 years d. males, 15–24 years c. females, 15–24 years ANSWER: d 52. What is the approximate labour-force participation rate of the Canadian adult population (aged 15 and over)? b. 55 percent a. 47 percent d. 75 percent c. 66 percent ANSWER: c 53. In Canada in recent years, how does the unemployment rate among those aged 15 to 24 compare with that of older adults? a. less than that of older adults b. about the same as that of older adults Copyright Cengage Learning. Powered by Cognero.

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Chapter 9 - Unemployment and Its Natural Rate c. much higher than that of older adults ANSWER: c

d. approximately half that of older adults

54. What is a rough estimate of the natural rate of unemployment in Canada? b. 3 to 4 percent a. 1 to 2 percent d. 9 to 10 percent c. 6 to 7 percent ANSWER: c 55. Why was the 2009 recession also referred to as a “mancession”? 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 retailers ANSWER: b 56. Over the past 50 years, which region of Canada generally has had the highest unemployment rates? b. Quebec a. Atlantic Canada c. Ontario d. Western Canada ANSWER: a 57. Over the past 50 years, which region of Canada generally has had the lowest unemployment rates? a. Atlantic b. Quebec Canada c. Ontario d. Western Canada ANSWER: d 58. In one year, you meet 40 people who are each unemployed for one week and 10 people who are each unemployed for the whole year. Which statistic best describes this situation? a. 80 percent are short-term unemployed, and 25.3 percent are long-term unemployed b. 20 percent are short-term unemployed, and 80 percent are long-term unemployed c. 80 percent are short-term unemployed, and 20 percent are long-term unemployed d. 75 percent are short-term unemployed, and 25 percent are long-term unemployed ANSWER: c 59. Which of the following is NOT a reason why the labour force participation for women has increased over the past 100 years? a. the increase in technology that speeds up the time it takes to do household tasks b. the reduced number of children per family c. the change in political and social values Copyright Cengage Learning. Powered by Cognero.

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Chapter 9 - Unemployment and Its Natural Rate d. the steady decrease in the labour force participation for men over the same time period ANSWER: d 60. What happened in Quebec in 1997 that led to a continued rise in the labour force participation rate for women? a. the provincial government introduced a policy of highly subsidized childcare b. the province abolished its sales tax c. there was a huge decrease in the number of immigrants coming to Quebec d. the country was just entering into a recession ANSWER: a 61. Since 1951, what has happened to the labour-force participation rate of men and women? a. It has increased for both men and women. b. It has increased for men and decreased for women. c. It has decreased for men and increased for women. d. It has decreased for both men and women. ANSWER: c 62. What happened in Alberta in the mid-1990s that led to the lack of growth in the labour force participation rate for women? a. the increase in childcare costs b. the province increasing its sales tax c. the huge decrease in the number of immigrants coming to Alberta d. the country was just entering into a recession ANSWER: a 63. If an unemployed person quits looking for work, other things equal, which statement best describes the changes in the labour statistics? a. The unemployment rate decreases, and the labour-force participation rate increases. b. The unemployment rate decreases, and the labour-force participation rate decreases. c. The unemployment rate stays the same, and the labour-force participation rate decreases. d. The unemplo...