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Why might a favourable change to the economy such as technological change or a decrease in the price of imported oil be associated with an increase in frictional unemployment?

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Even generally favourable changes will u...

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Some people are counted as out of the labour force because they have made no serious or recent effort to look for work. However, some of these people may want to work even though they are too discouraged to make a serious effort. If these persons were counted as unemployed instead of out of the labour force, how would the labour statistics change?


A) The unemployment rate and the labour-force participation rate would be higher.
B) The unemployment rate would be higher, and the labour-force participation rate would be lower.
C) The unemployment rate would be lower, and the labour-force participation rate would be higher.
D) The unemployment rate and the labour-force participation rate would be lower.

E) None of the above
F) All of the above

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Dan decides to hire some additional workers for his golf cart factory. The equilibrium wage is $15 per hour. What does efficiency wage theory suggest is a reasonable wage for Dan to offer?


A) $15 per hour
B) less than $15 per hour, since some people would be willing to work for less
C) enough to attract the number of applicants necessary to fill the jobs available
D) more than $15 per hour, so as to attract a better pool of applicants

E) None of the above
F) A) and B)

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If the minimum wage was currently above the equilibrium wage, what would a decrease in the minimum wage do to the quantity demanded and quantity supplied of labour?


A) It would increase both the quantity demanded and the quantity supplied of labour.
B) It would decrease both the quantity demanded and the quantity supplied of labour.
C) It would increase the quantity of labour demanded and decrease the quantity supplied.
D) It would decrease the quantity of labour demanded and increase the quantity supplied.

E) None of the above
F) All of the above

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What is the effect of minimum-wage laws on unemployment?


A) Minimum-wage laws are the major cause of natural unemployment.
B) Minimum-wage laws probably increase teenage unemployment.
C) Minimum-wage laws mainly affect skilled workers.
D) Minimum-wage laws have no impact on unemployment.

E) B) and D)
F) B) and C)

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Table 9-1 This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. Table 9-1 This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. -Refer to the Table 9-1. What is the adult male labour-force participation rate in Bolivar? A) 7.40 percent B) 33.33 percent C) 37.03 percent D) 65.22 percent -Refer to the Table 9-1. What is the adult male labour-force participation rate in Bolivar?


A) 7.40 percent
B) 33.33 percent
C) 37.03 percent
D) 65.22 percent

E) B) and D)
F) None of the above

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Which condition causes structural unemployment?


A) Wages are kept above the equilibrium level.
B) People choose not to work at the equilibrium wage.
C) Some wages are below the equilibrium level.
D) Conditions for unemployment insurance benefits relax.

E) A) and B)
F) C) and D)

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In Sweden and Denmark, what percentage of the workers belong to unions?


A) almost zero
B) about the same as in Canada
C) a bit greater than in Canada
D) much greater than in Canada

E) A) and D)
F) A) and C)

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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.

E) A) and B)
F) B) and D)

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When a union bargains successfully with an employer, what happens to unemployment and wages in that industry?


A) unemployment and wages increase
B) unemployment and wages decrease
C) unemployment decreases and wages increase
D) unemployment increases and wages decrease

E) A) and B)
F) A) and C)

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Consider these facts: (1) Some people who are employed or who are not making a serious effort to find employment will report themselves as unemployed. (2) Some people who want to find work will be counted as out of the labour force. How do these facts affect the reported unemployment rate?


A) Both the first and the second facts tend to make the reported unemployment rate lower than the actual unemployment rate.
B) Both the first and the second facts tend to make the reported unemployment rate higher than the actual unemployment rate.
C) The first fact tends to make the reported unemployment rate higher than the actual unemployment rate. The second fact tends to make the reported unemployment rate lower than the actual rate.
D) The first fact tends to make the reported unemployment rate lower than the actual unemployment rate. The second fact tends to make the reported unemployment rate higher than the actual rate.

E) C) and D)
F) B) and C)

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What do the laws governing the activity of labour unions achieve?


A) They prevent unions from acting as cartels.
B) They allow workers joining a unionized firm to choose not to join the union.
C) They allow workers the right to representation and collective bargaining.
D) They limit the number of unionized organizations.

E) C) and D)
F) All of the above

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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.

E) B) and D)
F) B) and C)

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A foreign governmental statistics agency recently reported that there were 47.6 million people over age 25 who had at least a bachelor's degree. Of this number, 38.0 million were in the labour force and 35.9 million were employed. What was the unemployment rate in this group?


A) about 2.3 percent
B) about 5.5 percent
C) about 22.8 percent
D) about 55.1 percent

E) A) and B)
F) B) and C)

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The government operates programs for job training and job information intended to reduce unemployment. Which statement best describes how economists feel about such programs?


A) Most economists agree that such programs are of no use.
B) Most economists agree that such programs work very well.
C) Some economists claim that the government can do these things no better than firms, and individuals could do them for themselves.
D) Some economists believe that the private sector has no role in the process of job search.

E) A) and B)
F) A) and C)

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About half of all spells of unemployment end when the unemployed person leaves the labour force.

A) True
B) False

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In a labour demand and supply diagram, show the effects of the following events. In each case, discuss the changes in the equilibrium wage and employment. a. an increase in the wage income tax b. a new trade agreement that allows for foreign competition in the Canadian food sector (Hint: Consider how the elasticity of demand for food changes. How does that affect the elasticity of demand for labour in the food sector?)

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a. If the income tax increases, employme...

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Emma`s contract position just finished and she is looking for another job, but has not yet found one. Which pair of categories does Anna now belong to?


A) unemployed and not in the labour force
B) unemployed and in the labour force
C) employed and not in the labour force
D) employed and in the labour force

E) A) and D)
F) All of the above

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Teenage unemployment is higher than unemployment of people ages 20 and over. Explain why economists would attribute at least part of this difference to minimum-wage laws. (Hint: Who is likely to get paid more?)

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People who are experienced and educated ...

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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

E) None of the above
F) All of the above

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