Unemployment Fluctuations And The Nairu
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Question 1
Free
Multiple Choice
If the actual unemployment rate is equal to the NAIRU,then
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actual GDP will be higher than potential GDP.
actual GDP will be below potential GDP.
potential GDP will expand permanently.
the unemployment rate is 0%.
actual and potential GDP are equal.
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Question 2
Free
Multiple Choice
When real GDP is less than potential output,the unemployment rate ________ the NAIRU.
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falls toward
falls below
rises toward but never exceeds
is equal to
rises above
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Question 3
Free
Multiple Choice
When real GDP is greater than potential output,the unemployment rate ________ the NAIRU.
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falls toward
falls below
rises toward but never exceeds
is equal to
rises above
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Question 4
Free
Multiple Choice
When the growth rate of the labour force is greater than the growth rate of total employment,the unemployment rate
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decreases.
increases.
is below NAIRU.
is above NAIRU.
is equal to NAIRU.
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Question 5
Free
Multiple Choice
When the growth rate of the labour force is less than the growth rate of total employment,the unemployment rate
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decreases.
increases.
is below NAIRU.
is above NAIRU.
is equal to NAIRU.
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Question 6
Multiple Choice
Suppose that next year 300 000 existing jobs in the economy are eliminated through layoffs and plant closures,and 400 000 new jobs are created through expansions and the creation of new firms.The amount of unemployment will rise over that year if
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more than 300 000 people drop out of the labour force.
more than 100 000 people drop out of the labour force.
less than 100 000 people drop out of the labour force.
less than 100 000 people join the labour force.
more than 100 000 people join the labour force.
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Question 7
Multiple Choice
Suppose that next year 300 000 existing jobs in the economy are eliminated and 200 000 new jobs are created.The amount of unemployment will decline over that year if
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more than 100 000 people drop out of the labour force.
less than 100 000 people drop out of the labour force.
less than 100 000 people join the labour force.
more than 100 000 people join the labour force.
more than 300 000 people join the labour force.
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Question 8
Multiple Choice
If there are more job vacancies in the economy than there are unemployed workers,it is likely that
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fiscal policy aimed at increasing aggregate demand would cause the actual unemployment rate to move toward the NAIRU.
the actual unemployment rate is less than the NAIRU.
the economy has a high NAIRU.
there is excessive involuntary unemployment in this economy.
there is no structural unemployment in this economy.
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Question 9
Multiple Choice
If the actual unemployment rate is one percentage point less than the NAIRU,then
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actual and potential GDP are equal.
actual GDP is greater than potential GDP.
actual GDP is less than potential GDP.
potential GDP will expand permanently.
potential GDP will contract until it equals actual GDP.
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Question 10
Multiple Choice
The total amount of unemployment in the economy rises when the flows of individuals
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into unemployment are positive.
into unemployment exceed the flows out of unemployment.
out of unemployment exceed the flows into unemployment.
out of unemployment are negative.
out of unemployment are equal to the flows into unemployment.
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Question 11
Multiple Choice
The total amount of unemployment in the economy decreases when the flows of individuals
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into unemployment are positive.
into unemployment exceed the flows out of unemployment.
out of unemployment exceed the flows into unemployment.
out of unemployment are negative.
out of unemployment are equal to the flows into unemployment.
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Question 12
Multiple Choice
The total amount of unemployment in the economy is constant when the flows of individuals
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into unemployment are positive.
into unemployment exceed the flows out of unemployment.
out of unemployment exceed the flows into unemployment.
out of unemployment are negative.
out of unemployment are equal to the flows into unemployment.
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Question 13
Multiple Choice
One reason that economists are interested in gross flows in the labour market as well as in the stock of unemployment is that examining the gross flows
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gives a better estimate of NAIRU.
gives a good estimate of the incidence of unemployment.
excludes only the new entrants and retirements of people moving into and out of the labour force.
in relation to the stock of unemployment can indicate the amount of time the average person spends unemployed.
provides a better indication of the total number of people unemployed at any one time.
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Question 14
Multiple Choice
One reason that economists are interested in the gross flows in the labour market as well as the stocks of unemployed is that examining the flows
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gives us a better estimate of NAIRU.
gives more insight into the amount of labour-market turnover.
provides a better indication of the total number of people unemployed at any one time rather than just looking at the stocks.
provides a good estimate of the overall level of employment.
provides the only reliable way to measure cyclical unemployment.
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Question 15
Multiple Choice
Suppose John finishes school and immediately gets a part-time job.The measured unemployment rate would
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rise because he was not in the labour force when in school.
not change since he is now employed.
fall because he was considered unemployed when in school.
fall because he was not in the labour force when in school.
not change because part-time jobs aren't counted in the labour force.
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Question 16
Multiple Choice
When the actual unemployment rate is equal to the NAIRU,we can say that
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all remaining unemployment is structural.
the economy is experiencing no lost output due to frictional unemployment.
the economy is at full employment.
frictional unemployment is zero.
frictional and structural unemployment are both zero.
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Question 17
Multiple Choice
When one worker is unemployed for one year,
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we no longer include that worker in labour-force statistics.
there may be significant personal costs,but there is no cost to the economy.
it is not a problem because as soon as the worker is employed again,any loss of output goes away.
there is no effect on national income.
the output this worker would have produced is lost forever.
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Question 18
Multiple Choice
Suppose in a given month the flow out of unemployment equals 300 000 per month,and the flow into unemployment equals 330 000 per month.The rate of unemployment has
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increased by 30 000.
decreased by 30 000.
increased by 10%.
decreased by 10%.
Not enough information to determine.
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Question 19
Multiple Choice
Suppose the official rate of unemployment reported by Statistics Canada is 7.2%.One reason this is likely to be an understatement of the amount of "true" unemployment is that
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the official rate is a measure of gross flows into and out of unemployment rather than net flows.
discouraged workers who have given up searching for a job,but would take one if offered,are not included.
the official rate is a measure of net flows into and out of unemployment rather than gross flows.
Statistics Canada does not have a good measure of the numbers of people entering the labour force.
seasonal workers are not included at all in the official data.
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Question 20
Multiple Choice
Suppose the official rate of unemployment reported by Statistics Canada declines from one month to the next from 7.5% to 7.2%,but we also know that the stock of unemployed workers has not changed.How is this possible?
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The labour force has declined due to out-migration of working-age people.
The labour force has grown as previously discouraged workers re-start their job-search process as unemployed individuals.
Some individuals who were previously outside the labour force have joined the labour force and immediately found jobs.
We have gone from a month with high seasonal unemployment to a month with low seasonal unemployment.
We have gone from a month with low seasonal unemployment to a month with high seasonal unemployment.
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