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1
What would be the effect on the unemployment rate if all the part-time workers were to become full-time workers?
A)It would decrease.
B)It would increase.
C)It would remain unchanged.
D)It depends on the size of the labour force.
2
All of the following, except one, are reasons why the CPI and GDP deflator differ. Which is the exception?
A)The CPI is an explicit index using a constructed bundle of goods; the GDP deflator is an implicit index measuring the ratio of nominal to real GDP.
B)The bundle of goods remains constant with the CPI; the bundle of goods in the GDP deflator changes each year.
C)The CPI does not include capital or government goods and services; the GDP deflator includes both.
D)The CPI excludes imported goods; the GDP deflator includes imported goods.
3
When is the Canadian economy considered to be at full employment?
A)When 12 percent of the labour force is unemployed
B)When 90 percent of the working-age population is employed
C)When 90 percent of the labour force is employed
D)When approximately 5 to 7 percent of the labour force is unemployed
E)When everyone who wants a job has one
4
Which of the following statements concerning the natural rate of unemployment is correct?
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 percent in Canada today.
E)All of the above.
5
What does Okun’s law refer to?
A)The relationship between job vacancies and unemployment
B)The seemingly constant ratio between those in the labour force and the total population
C)The relationship between the level of cyclical unemployment and the difference between potential and actual GDP
D)The difference between an economy’s real and nominal GDP
E)The time it takes a number to double given a certain percentage growth rate
6
All of the following statements, except one, are correct concerning unanticipated increases in inflation. Which is the exception?
A)It redistributes wealth and income in unpredictable ways.
B)It increases the real value of savings.
C)It decreases the purchasing power of money.
D)It benefits debtors at the expense of creditors.
E)It affects some individuals much more than others.
7
If the nominal GDP of a country is equal to $560 billion and its real GDP is $470 billion, what is the value of its GDP deflator?
A)1.19
B)83.93
C)$2632
D)119.15
8
Which two pieces of information would allow us to calculate a GDP deflator?
A)Prices and interest rates
B)Nominal GDP and real GDP figures
C)Unemployment rates and Okun’s law
D)Prices and the rule of 70
E)GDP rates and the rule of 70
9
Which of the following categories would a 35-year-old, healthy male who does not work because he has inherited a large fortune most likely fall into?
A)The labour force
B)The working-age population
C)Employed
D)Unemployed
10
Under what condition could the number of people employed and the number of people unemployed both increase?
A)If the economy entered a severe recession
B)If the number of people in the labour force increased more than the number of people employed
C)If the total number of discouraged workers increased
D)If the total population decreased
E)If the number of people in the labour force grew more slowly than the increase in the number of people employed





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