Q: Suppose the following data for a country: 20 million people are employed, 2 million are unemployed and actively seeking work, and 8 million are not in the labour force. What is the unemployment rate?

$$\frac{2\text{ million}}{20\text{ million} + 2\text{ million}} \times 100 = 9.1\%$$

Q: If the Consumer Price Index (CPI) was 120 in 2020 and 132 in 2021, what was the inflation rate between these years?

$$\frac{132 - 120}{120} \times 100 = 10\%$$

Q: A country’s CPI market basket cost $$1,500 in 2022 and 1$$,300 in the base year. What is the price index for 2022?

$$\frac{1,500}{1,300} \times 100 = 115.4$$

Question 1

Which of the following best describes the labour force in Canada?

Accepted Answer

All individuals aged 15 years or older who are either employed or actively seeking and available for work.

Question 2

Suppose the following data for a country: 20 million people are employed, 2 million are unemployed and actively seeking work, and 8 million are not in the labour force. What is the unemployment rate?

Accepted Answer

$$\frac{2	ext{ million}}{20	ext{ million} + 2	ext{ million}} 	imes 100 = 9.1\%$$

Question 3

Which of the following is an example of structural unemployment?

Accepted Answer

A factory worker loses their job because their skills are no longer needed due to automation.

Question 4

If the Consumer Price Index (CPI) was 120 in 2020 and 132 in 2021, what was the inflation rate between these years?

Accepted Answer

$$\frac{132 - 120}{120} 	imes 100 = 10\%$$

Question 5

Which of the following would NOT be included in the official unemployment rate calculation in Canada?

Accepted Answer

A discouraged worker who has stopped looking for a job.

Question 6

During a period of unanticipated inflation, which group is most likely to benefit?

Accepted Answer

Borrowers, because they repay loans with money that has less purchasing power.

Question 7

Which of the following best describes frictional unemployment?

Accepted Answer

Unemployment caused by workers searching for new jobs or entering the workforce.

Question 8

If the nominal interest rate is 6% and the expected inflation rate is 4%, what is the real interest rate?

Accepted Answer

$$6\% - 4\% = 2\%$$

Question 9

Which of the following is a cost associated with inflation?

Accepted Answer

Menu costs, which are the costs of changing prices and printing new price lists.

Question 10

A country’s CPI market basket cost $$1,500 in 2022 and 1$$,300 in the base year. What is the price index for 2022?

Accepted Answer

$$\frac{1,500}{1,300} 	imes 100 = 115.4$$

Question 11

Which of the following is NOT a type of unemployment recognized in macroeconomics?

Accepted Answer

Permanent unemployment

Question 12

Which of the following best describes the natural rate of unemployment?

Accepted Answer

The sum of frictional and structural unemployment in the absence of cyclical unemployment.

Question 13

If a country experiences a sustained decrease in the average price level of goods and services, this is known as:

Accepted Answer

Deflation

Question 14

Which of the following is a leading indicator that may signal an upcoming economic downturn?

Accepted Answer

An increase in employment insurance claims.

Question 15

A cost-of-living adjustment (COLA) clause in a labour contract is designed to:

Accepted Answer

Protect workers from inflation by adjusting wages based on the Consumer Price Index (CPI).

Question 16

Which of the following would NOT directly contribute to economic growth?

Accepted Answer

A rise in consumer savings with no increase in spending.

Question 17

If a media report claims that house prices have increased 18 times over 50 years without adjusting for inflation, what is the main issue with this claim?

Accepted Answer

It ignores the effect of inflation, exaggerating the real increase in house prices.

Question 18

During the COVID-19 pandemic, which group experienced the largest decline in employment rates in Canada?

Accepted Answer

Young men and women not in school full-time.

Question 19

Which of the following best describes the difference between nominal and real values?

Accepted Answer

Nominal values are expressed in current dollars, while real values are adjusted for inflation.

Question 20

Which of the following scenarios best illustrates cyclical unemployment?

Accepted Answer

A worker is laid off during a recession due to decreased demand for goods.

Macroeconomics: GDP, Unemployment, and Inflation (Canadian Perspective)

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