Question 1

Figure 9-1
This figure shows the effect of a minimum-wage law. 
-Refer to Figure 9-1. If there was a minimum wage of $4 and then the government instituted a minimum wage of $5, what would happen to employment in this market?

Accepted Answer

A)   Unemployment would be unchanged.
B)   Unemployment would drop by 10.
C)   Unemployment would rise by 10.
D)   Unemployment would rise by 20.E) A) and B)
F) A) and D)

Question 2

Which of the following constitutes the labour force?

Accepted Answer

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 populationE) All of the above
F) B) and C)

Question 3

If the wage is kept above the equilibrium wage for any reason, the result is structural unemployment.

Accepted Answer

A) True 
 B)False

Question 4

Figure 9-1
This figure shows the effect of a minimum-wage law. 
-Refer to Figure 9-1. Which of the following describes the equilibrium point in the diagram where there is an absence of the minimum-wage law?

Accepted Answer

A)   $4 and 20 workers
B)   $5 and 30 workers
C)   $5 and 40 workers
D)   $6 and 40 workersE) B) and C)
F) C) and D)

Question 5

Which of the following best defines gross job creation?

Accepted Answer

A)   the number of jobs created by new firms less jobs lost in established firms in a given year
B)   the sum of the increase in the number of jobs across all new and established firms in a given year
C)   the increase in the number of jobs created by new firms in a given year
D)   the increase in the number of jobs created by established firms in a given yearE) A) and B)
F) A) and C)

Question 6

In 2019, Shea opens up a new interior design business and creates five additional jobs in his firm. If net employment growth in 2019 was zero, what was a likely explanation for this?

Accepted Answer

A)   the number of jobs created by new firms was less than jobs created in established firms in 2019
B)   the number of jobs created by new firms was equal to jobs created in established firms in 2019
C)   job creation was less than job destruction in 2019
D)   job destruction was equal to job creation in 2019E) A) and B)
F) All of the above

Question 7

Approximately what percentage of all Canadian workers are union members?

Accepted Answer

A)   5 percent
B)   30 percent
C)   50 percent
D)   95 percentE) C) and D)
F) A) and D)

Question 8

How are discouraged workers counted in unemployment statistics?

Accepted Answer

A)   They are not counted either as part of the adult population or as part of the labour force.
B)   They are counted as part of the adult population, but not as part of the labour force.
C)   They are counted as part of the adult population and as unemployed.
D)   They are counted as unemployed, but not part of labour force.E) None of the above
F) A) and B)

Question 9

According to economists, how should the reported unemployment rate be viewed?

Accepted Answer

A)   as a useful but imperfect measure of joblessness
B)   as clearly smaller than the true unemployment rate
C)   as clearly larger than the true unemployment rate
D)   as being very close to the true unemployment rateE) A) and D)
F) A) and B)

Question 10

Efficiency wages create structural unemployment.

Accepted Answer

A) True 
 B)False

Question 11

What is the effect of anything that makes the efficiency wage rise relative to the market-clearing wage?

Accepted Answer

A)   It increases both the quantity demanded and the quantity supplied of labour.
B)   It decreases both the quantity demanded and the quantity supplied of labour.
C)   It increases the quantity demanded and decreases the quantity supplied of labour.
D)   It decreases the quantity demanded and increases the quantity supplied of labour.E) A) and B)
F) All of the above

Question 12

Which law is most likely to reduce the natural rate of unemployment?

Accepted Answer

A)   a law that makes all provinces repeal right-to-work laws
B)   a law that makes it harder to find out about job candidates' past job history
C)   a law that abolishes the minimum wage
D)   a law that make it more difficult to monitor the efforts of workersE) A) and D)
F) B) and D) C

Question 13

Which group has the highest labour-force participation rate in Canada?

Accepted Answer

A)   females, 15-24 years
B)   males, 15-24 years
C)   females, 25-44 years
D)   males, 25-44 yearsE) B) and C)
F) A) and D)

Question 14

Which province has the highest percentage of unionized workers?

Accepted Answer

A)   Ontario
B)   Newfoundland and Labrador
C)   British Columbia
D)   QuebecE) None of the above
F) B) and C)

Question 15

Suppose that in 2019, the demand for solar panel technicians increased and the demand for pipeline and oil field workers diminished. Which type of unemployment does this situation illustrate?

Accepted Answer

A)   frictional unemployment created by a sectoral shift
B)   structural unemployment created by a sectoral shift
C)   frictional unemployment created by efficiency wages
D)   structural unemployment created by efficiency wagesE) B) and C)
F) C) and D)

Question 16

From time to time, the demand for workers has risen in one region of Canada and fallen in another. Which type of unemployment does this occurrence illustrate?

Accepted Answer

A)   frictional unemployment created by efficiency wages
B)   structural unemployment created by efficiency wages
C)   frictional unemployment created by sectoral shifts
D)   structural unemployment created by sectoral shiftsE) A) and B)
F) All of the above C

Question 17

Who would NOT be included in the labour force?

Accepted Answer

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 oneE) A) and C)
F) A) and D) B

Question 18

Typically, how much more do union members earn than similar workers who do not belong to a union?

Accepted Answer

A)   0 to 5 percent
B)   5 to 10 percent
C)   10 to 20 percent
D)   20 to 30 percentE) A) and B)
F) All of the above

Question 19

Most spells of unemployment are short, and most unemployment observed at any given time is long term. How can this be?

Accepted Answer

Most unemployed people in the economy ar...

Question 20

What is the most likely result of efficiency wages?

Accepted Answer

A)   reduced labour-force participation rates
B)   reduced natural rate of unemployment
C)   reduced incentive to shirk responsibilities
D)   increased worker turnoverE) B) and C)
F) B) and D)

Exam 9: Unemployment and Its Natural Rate

Figure 9-1 This figure shows the effect of a minimum-wage law. -Refer to Figure 9-1. If there was a minimum wage of $4 and then the government instituted a minimum wage of $5, what would happen to employment in this market?

Correct AnswerverifiedShow Answer

Which of the following constitutes the labour force?

Correct AnswerverifiedShow Answer

If the wage is kept above the equilibrium wage for any reason, the result is structural unemployment.

Correct AnswerverifiedShow Answer

Figure 9-1 This figure shows the effect of a minimum-wage law. -Refer to Figure 9-1. Which of the following describes the equilibrium point in the diagram where there is an absence of the minimum-wage law?

Correct AnswerverifiedShow Answer

Which of the following best defines gross job creation?

Correct AnswerverifiedShow Answer

In 2019, Shea opens up a new interior design business and creates five additional jobs in his firm. If net employment growth in 2019 was zero, what was a likely explanation for this?

Correct AnswerverifiedShow Answer

Approximately what percentage of all Canadian workers are union members?

Correct AnswerverifiedShow Answer

How are discouraged workers counted in unemployment statistics?

Correct AnswerverifiedShow Answer

According to economists, how should the reported unemployment rate be viewed?

Correct AnswerverifiedShow Answer

Efficiency wages create structural unemployment.

Correct AnswerverifiedShow Answer

What is the effect of anything that makes the efficiency wage rise relative to the market-clearing wage?

Correct AnswerverifiedShow Answer

Which law is most likely to reduce the natural rate of unemployment?

Correct AnswerverifiedC

Which group has the highest labour-force participation rate in Canada?

Correct AnswerverifiedShow Answer

Which province has the highest percentage of unionized workers?

Correct AnswerverifiedShow Answer

Suppose that in 2019, the demand for solar panel technicians increased and the demand for pipeline and oil field workers diminished. Which type of unemployment does this situation illustrate?

Correct AnswerverifiedShow Answer

From time to time, the demand for workers has risen in one region of Canada and fallen in another. Which type of unemployment does this occurrence illustrate?

Correct AnswerverifiedC

Who would NOT be included in the labour force?

Correct AnswerverifiedB

Typically, how much more do union members earn than similar workers who do not belong to a union?

Correct AnswerverifiedShow Answer

Most spells of unemployment are short, and most unemployment observed at any given time is long term. How can this be?

Correct AnswerverifiedMost unemployed people in the economy ar...View AnswerShow Answer

What is the most likely result of efficiency wages?

Correct AnswerverifiedShow Answer

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C

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C

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B

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Most unemployed people in the economy ar...
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