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5.1 Measuring the Unemployment Rate and the Labour Force Participation Rate
1) In November 2015 the Purchasing Managers' Index for Canadian manufacturers was 48.6 which
predicts a(n) ________ in the number of persons it employed and a(n) ________ in the total number of
persons unemployed in the economy.
A) decrease; increase
B) decrease; decrease
C) increase; decrease
D) increase; increase
Answer: A
Diff: 1 Page Ref: 105-106
Topic: The Unemployment Rate
2CE: Classic (1CE)- updated for 2CE
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
Special Feature: Chapter Opener: Canadian Manufacturers Grow While Others Shrink
2) The economy has gone into a recession. You have majored in computer science and, because of the
recession, have difficulty in finding a job. Should you go back to school and get a second major?
A) Yes, the recession will ensure that I will never find a job as a programmer.
B) Yes, the recession will lower income in my field permanently.
1
Copyright © 2018 Pearson Canada, Inc.
C) No, the recession will most likely be short-lived and I can get a job after it is over.
D) No, the recession will have no impact on my ability to get a job or my future income.
E) Yes, the recession will likely reduce the demand for computer science majors permanently.
Answer: C
Diff: 2 Page Ref: 106
Topic: How Long Are People Typically Unemployed?
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
Special Feature: Economics in Your Life: Should You Change Your Career Plans If You Graduate During a
Recession?
3) The unemployment rate is an important economic statistic that can tell us about the health of the
economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect
A) it is more likely that an incumbent Prime Minister will be re-elected.
B) that stock prices are more likely to fall.
C) that jobs are less difficult to find.
D) that investors will be more optimistic about the economy.
E) consumer spending is likely to rise.
Answer: B
Diff: 1 Page Ref: 106
Topic: The Unemployment Rate
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
4) Statistics Canada would categorize a person as ________ if they were temporarily away from their job
because they were ill.
A) employed
B) unemployed
C) a discouraged worker
D) out of the labour force
E) disabled
Answer: A
Diff: 1 Page Ref: 107
Topic: The Labour Force Survey
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
3
Copyright © 2018 Pearson Canada, Inc.
7) Suppose that homemakers are included as employed in the labour force statistics, rather than being
counted as out of the labour force. This would
A) increase the measured unemployment rate.
B) increase the measured labour force participation rate.
C) decrease the number of persons in the labour force.
D) decrease the number of persons in the working-age population.
E) increase the number of people eligible to work in Canada.
Answer: B
Diff: 3 Page Ref: 108
Topic: Labour Force Participation
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
Table 5.1
Total population 20,000
Working-age population 15,000
Employment 1,000
Unemployment 100
8) Refer to Table 5.1. The unemployment rate for this simple economy equals
A) (100/1,000) × 100 percent.
B) (100/1,100) × 100 percent.
C) (100/15,000) × 100 percent.
D) (100/20,000) × 100 percent.
E) (1000/15,000) × 100 percent.
Answer: B
Diff: 2 Page Ref: 108
Topic: The Unemployment Rate
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Analytic Skills
9) Refer to Table 5.1. The labour force participation rate for this simple economy equals
A) (1,000/1,100) × 100 percent.
B) (1,000/15,000) × 100 percent.
C) (1,100/15,000) × 100 percent.
D) (1,100/20,000) × 100 percent.
E) (15,000/20,000) × 100 percent.
Answer: C
Diff: 2 Page Ref: 108
Topic: Labour Force Participation
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Analytic Skills
4
Copyright © 2018 Pearson Canada, Inc.
10) Suppose the working-age population of a fictional economy falls into the following categories: 90 are
retired or homemakers; 60 have full-time employment; 20 have part-time employment; 20 do not have
employment, but are actively looking for employment; and 10 would like employment but do not have
employment and are not actively looking for employment. The official unemployment rate as calculated
by Statistics Canada would equal
A) (20/60) × 100%.
B) (20/80) × 100%.
C) (30/80) × 100%.
D) (20/100) × 100%.
E) (60/90) × 100%.
Answer: D
Diff: 2 Page Ref: 108
Topic: The Unemployment Rate
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Analytic Skills
11) Suppose the labour force stays constant, and the working-age population stays constant, but a
greater number of persons who were unemployed become employed. The labour force participation
rate will
A) increase.
B) decrease.
C) remain constant.
D) not change in a way that can be predicted.
Answer: C
Diff: 2 Page Ref: 108
Topic: Labour Force Participation
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
12) The unemployment rate equals the number of unemployed divided by the ________, all times 100.
A) number of employed
B) labour force
C) working-age population
D) total population
E) discouraged workers
Answer: B
Diff: 1 Page Ref: 108
Topic: The Unemployment Rate
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
5
Copyright © 2018 Pearson Canada, Inc.
13) Suppose the government launches a successful advertising campaign that convinces workers with
high school degrees to quit their jobs and become full time students. This would cause
A) the unemployment rate to decrease.
B) the labour force participation rate to decrease.
C) the number of discouraged workers to increase.
D) no change in the unemployment rate.
E) the employment population ratio to increase.
Answer: B
Diff: 3 Page Ref: 108
Topic: Labour Force Participation
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Analytic Skills
14) Someone who is available for work but has not actively looked for work in the previous four weeks
would be classified as
A) employed.
B) unemployed.
C) not in the labour force.
D) not in the working-age population.
E) not legally entitled to work.
Answer: C
Diff: 1 Page Ref: 107
Topic: The Labour Force Survey
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
6
Copyright © 2018 Pearson Canada, Inc.
16) Which of the following labour market statistics best indicates the amount of labour that is available
to the economy from a given working-age population?
A) unemployment rate
B) discouraged-worker ratio
C) labour force participation rate
D) the ratio of minimum wage to inflation
E) the employment population ratio
Answer: C
Diff: 1 Page Ref: 123
Topic: Labour Force Participation
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
17) Which of the following cause the unemployment rate as measured by Statistics Canada to
understate the true extent of joblessness?
A) inflation
B) discouraged workers
C) people employed in the underground economy
D) unemployed persons falsely report themselves to be actively looking for a job
E) a shrinking working age population
Answer: B
Diff: 2 Page Ref: 108
Topic: Problems with Measuring the Unemployment Rate
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
18) Which of the following cause the unemployment rate as measured by Statistics Canada to overstate
the true extent of joblessness?
A) inflation
B) discouraged workers
C) counting people as employed who are working part time, although they would prefer to be working
full time
D) unemployed persons falsely report themselves to be actively looking for a job
E) people choosing not to participate in the labour force
Answer: D
Diff: 2 Page Ref: 108
Topic: Problems with Measuring the Unemployment Rate
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
7
Copyright © 2018 Pearson Canada, Inc.
19) Which of the following explains the changes in the Canadian adult male labour force participation
rate since 1976?
A) More men are joining the military as compared to the past.
B) More men are retiring later in life as compared to the past.
C) Fewer men consider themselves discouraged workers as compared to the past.
D) Younger men are remaining in school longer as compared to the past.
E) There are fewer working age males than in the past.
Answer: D
Diff: 1 Page Ref: 108
Topic: Labour Force Participation
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
20) In November 2015, Canada saw an increase of ________ jobs for the same time the previous year.
A) 183,000
B) 124,000
C) 21,500
D) 3.1 percent
E) 5.1 percent
Answer: B
Diff: 1 Page Ref: 108
Topic: Labour Force Participation
2CE: Classic (1CE)- updated for 2CE
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
21) The recession that followed the global financial crisis of 2007-2009 caused ________ in Canada.
A) less unemployment
B) a rise in the labour force participation rate
C) an increase in the duration a typical unemployed person was out of work
D) less government spending
E) a drop in the working age population
Answer: C
Diff: 1 Page Ref: 109
Topic: The Unemployment Rate
2CE: New to 2CE
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
8
Copyright © 2018 Pearson Canada, Inc.
22) From 1981 until 2014 , the labour force participation rate for adult men has ________ and for adult
women has ________.
A) increased; increased
B) increased; decreased
C) decreased; increased
D) decreased; decreased
Answer: C
Diff: 1 Page Ref: 108
Topic: Labour Force Participation
2CE: Classic (1CE)- updated for 2CE
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
23) Using a broader measure of the unemployment rate where discouraged workers and part-time
workers who wished to work full time were counted as unemployed, you would expect this
unemployment rate to ________ compared to the Statistics Canada measured unemployment rate.
A) increase
B) more than double
C) decrease
D) barely change
E) fall by half
Answer: A
Diff: 1 Page Ref: 108
Topic: Labour Force Participation
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
24) In the modern Canadian economy, the typical unemployed person stays unemployed for
A) a relatively long time, over a year.
B) a relatively short time, less than 13 weeks.
C) a long time during expansions and short time during recessions.
D) an amount of time that is hard to quantify.
E) a moderately long time, more than 26 weeks.
Answer: B
Diff: 1 Page Ref: 109-110
Topic: How Long Are People Typically Unemployed?
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
9
Copyright © 2018 Pearson Canada, Inc.
25) An issue with the Labour Force Survey (LFS) which overstates the extent of joblessness is
A) individuals who are working but concealing it for legal reasons are counted as unemployed.
B) they verify claims that people have actively looked for work.
C) they tend to count unemployed people more often because they are not working.
D) there is no distinction between employees who work part-time but would like to have a full-time job
and those who are content with their full- or part-time job.
E) people who choose not to work are counted as unemployed.
Answer: A
Diff: 1 Page Ref: 107
Topic: Labour Force Survey
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
26) The most important group not identified by the unemployment rate is
A) seniors.
B) discouraged workers.
C) part-time workers seeking full-time work.
D) those under the minimum working age.
E) students.
Answer: B
Diff: 1 Page Ref: 107
Topic: Labour Force Survey
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
27) Which of the following statements is true about the Canadian economy?
A) Each year, many new jobs are created, but few existing jobs are destroyed, and the unemployed find
jobs quickly.
B) Each year, few new jobs are created, but few existing jobs are destroyed, keeping unemployment low.
C) Each year, many new jobs are created and many existing jobs are destroyed.
D) Each year few jobs are created, and therefore it takes the unemployed a long time to find a new job.
E) Each year many more jobs are destroyed than are created.
Answer: C
Diff: 1 Page Ref: 110
Topic: Job Creation and Job Destruction
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
28) Counting part-time workers who are looking for full-time work as employed overstates the degree
of joblessness in the economy.
Answer: FALSE
Diff: 2 Page Ref: 107
Topic: The Labour Force Survey
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
10
Copyright © 2018 Pearson Canada, Inc.
29) In Canada, the typical person who has lost his or her job finds another one in a few months except
during severe recessions.
Answer: TRUE
Diff: 1 Page Ref: 109-110
Topic: How Long Are People Typically Unemployed?
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
30) The labour force participation rates of women have rapidly increased since 1976.
Answer: TRUE
Diff: 2 Page Ref: 108
Topic: Labour Force Participation
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Reflective Thinking
11
Copyright © 2018 Pearson Canada, Inc.
31) Fill in the missing values in the table of data collected in the fictitious Labour Force Survey below.
Show your work.
Working-age
population
Employment
Unemployment
Unemployment rate 5.4%
Labour force 135,113
Labour force
participation rate 67.0%
Answer:
Working-age
population 201,661
Employment 127,817
Unemployment 7,296
Unemployment rate 5.4%
Labour force 135,113
Labour force
participation rate 67.0%
12
Copyright © 2018 Pearson Canada, Inc.
32) Fill in the missing values in the table of data collected in the fictitious Labour Force Survey below.
Show your work.
Working-age
population 235,900
Employment
Unemployment
Unemployment rate 9.4%
Labour force
Labour force
participation rate 65.5%
Answer:
Working-age
population 235,900
Employment 139,991
Unemployment 14,524
Unemployment rate 9.4%
Labour force 154,515
Labour force
participation rate 65.5%
13
Copyright © 2018 Pearson Canada, Inc.
33) Statistics Canada counts as employed people who work part-time, but would prefer to work full-
time. Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as
unemployed. Explain how the unemployment rate and the labour force participation rate would
change.
Answer: The unemployment rate would increase and the labour force participation rate would stay the
same. The number of unemployed would rise, but the labour force would stay the same. The part-time
workers who wanted to be full-time workers would simply go from being employed to unemployed.
With no change in the labour force, the labour force participation rate would not change.
Diff: 3 Page Ref: 108
Topic: The Unemployment Rate
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Analytic Skills
34) Statistics Canada does not count discouraged workers as unemployed. Suppose discouraged
workers were counted as unemployed. Explain how the unemployment rate and the labour force
participation rate would change.
Answer: Both the unemployment rate and the labour force participation rate would increase. The
number of unemployed would rise, as would the labour force. The unemployment rate would rise
because adding the same number to the numerator and the denominator of a fraction that is less than
one increases the value of the fraction. The labour force participation rate would rise because the labour
force increases with no change in the working-age population.
Diff: 3 Page Ref: 108
Topic: Labour Force Participation
Learning Outcome: 5.1 Define the unemployment rate and the labour force participation rate and understand how
they are computed
AACSB: Analytic Skills
14
Copyright © 2018 Pearson Canada, Inc.
36) In November 2015, the Purchasing Managers' Index (PMI) for Canada 's manufacturing sector was
48.6 while the PMI for Germany was 52.9. Based solely on this data, we would expect
A) employment to rise in both regions.
B) employment to fall in both regions.
C) employment to remain stable in Canada and fall in Germany.
D) employment to fall in Canada and remain stable in Germany.
E) employment to fall in Canada and rise in Germany.
Answer: E
Diff: 1 Page Ref: 105-106
Topic: The Unemployment Rate
2CE: Classic (1CE)- updated for 2CE
Learning Outcome: Macro 14: Identify different types and measures of unemployment and discuss its causes
AACSB: Reflective Thinking
Special Feature: Chapter Opener: Canadian Manufacturers Grow While Others Shrink
37) Upon your graduation from university, you find that the economy is in recession and the
unemployment rate is relatively high. Nonetheless, you continue along your career path looking for a
new job because
A) the cost of additional education is always higher during recession.
B) high unemployment rates do not usually last for very long.
C) looking for work is your only option.
D) the wages of university graduates do not fall during recession.
E) recessions typically last longer than it takes to complete a second university degree.
Answer: B
Diff: 1 Page Ref: 106
Topic: Government Policies
2CE: 1CE
Learning Outcome: Macro 14: Identify different types and measures of unemployment and discuss its causes
AACSB: Reflective Thinking
Special Feature: Economics in Your Life: Should You Change Your Career Plans If You Graduate During a
Recession?
15
Copyright © 2018 Pearson Canada, Inc.
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natural relationship of one idea to another—and its conscious
recognition at the time of observation, or later, during reflection, that
one’s memory is aided. This is what psychologists have always
called “the law of the association of ideas.” It is a natural law, which
even a child unconsciously recognizes. The baby subconsciously or
instinctively knows that food and its pleasant sensations of comfort
are associated with its mother’s breast. Star and sky, sea and ship,
automobile and swift travel, gun and war, cyclone and disaster, are
instances of natural and simple association that all people recognize.
In the cultivation, discipline, strengthening of the powers of the
memory, this natural law can be made to render marvelous service.
For not only can man avail himself of faculties of the mind
unconsciously exercised, he has the additional power of consciously
directing their exercise. Just as our domestic water systems are the
result of the conscious direction of the self-flowing water in the
course we wish it to flow, so is the enlarged power of our memories
the result of the conscious and purposeful direction of our
observation, reflection, and thought-linking to that end. Drawn from
personal experience there are five methods of thought-linking which
have proved themselves of great help. These are: First, Incidental.
Second, Accidental. Third, Scientific. Fourth, Pictorial. Fifth,
Constructive.
A
Abraham Lincoln Walks at Midnight, 520
Adams, Charles F., 338, 393
Advance, The Great, 534
Adventure, A Startling, 150
” An Unexpected, 258
AFTER DINNER SPEAKING, 711
Ain’t It the Truth (exercise), 35
Aldrich, Thomas B., 490, 665
All in the Emphasis, 311
Alexander, S. J., 641, 642, 643
Alexandra, A Welcome to, 633
Americanism, Creed of, 677
America and Its Flag, 559
” Music of, 21
Analysis, Progressive, 112
Ancient Mariner, 49
Andersen, Hans C., 191
Anderson, Alexander, 427
” John, My Jo, 574
Annabel Lee, 430
” The Lover of, 431
Apostrophe to the Ocean, 536
Apple Blossoms, 588
Arena, A Combat in the, 272
Arrow and the Song, The, 630
ARTICULATION EXERCISES, 27 et seq.
As I Came Down from Lebanon, 587
Aspirates, 28
As You Like It (quoted), 658-59
At Grandma’s, 391
Authors, Study Great, 2
Author’s Thought, Getting the, 7
B
Baby, Rocking the, 434
Bacon, Francis, 49
Bad Night, A, 131
Ballad of the King’s Singer, The True, 498
Banishment Scene, 662
Bansman, William, 538
Barnes, W. H. L., 683
Barrett, Wilson, 187
Bashford, Herbert, 414, 416, 456, 460, 612, 624
Battle Field, The Children of the, 452
Beecher, Henry Ward, iv, 100
Belief, Author’s Purpose, 113
Bedford-Jones, H., 337
Bell Buoy, The, 70
Bells of San Gabriel, 631
” of Shandon, 636
” The Minaret, 621
Bennett, Henry Holcomb, 525
Beside the Dead, 433
Betty Botter, 30
Bill and His Billboard, 35
Billee, Little, 360
Bishop and the Convict, The, 220
Bishop, Justin Truitt, 142
Black Sailor’s Chanty, The, 408
Blacksmith of Limerick, The, 503
Bland, Henry Meade, 568
Blossom Time, In, 607
Blossoms, Apple, 588
Booth, Gov. Newton, 678
Boy Wanted, A, 285
” The Whistling, 358
Bosher, Kate Langley, 132
Bravest Battle, The, 519
Break! Break! Break!, 433
Breath Sounds, 28
Brook and the Wave, The, 590
Brook, Song of the, 603
Brooks, Fred Emerson, 331, 343, 345, 348, 357, 358, 385, 408,
481
Brookside, The, 579
Brotherhood, 540
Browne, J. Ross, 131, 146, 150, 245
Browning, Elizabeth, 19, 442, 539, 542
Browning, Robert, 57, 63, 64, 66, 99, 304, 305, 321, 429, 548,
627
Brother, Little, 177
Brown Wolf, 183
Bryant, William Cullen, 53
Bullets, The Song of the, 644
Bumpas, Bombardier B., 423
Bunner, Henry C., 336
Burdette, Robert, 24, 148, 157, 158
Buried Heart, The, 434
Burns, Robert, 547, 574, 617
Butterfly, To a February, 642
Byron, Lord, 536
C
Cable, George W., 204
California, 606
Camp-Meeting at Bluff Springs, 142
Camp, Pauline B., 76
Captain, O, My Captain, 171
Carleton, Will, 507
Carmichael, Sarah B., 67, 453
Carruth, W. H., 469
Cary, Alice, 334, 609
Castles, Irish, 344
Catacombs of Palermo, 146
Cavalier’s Song, The, 473
Cave, The Tiger’s, 239
Champlain, Legend of Lake, 207
Channing’s Symphony, 324
Chapman, Arthur, 587
Charge, Pickett’s, 481
Charlie Jones’s Bad Luck, 412
Cheney, Annie Elizabeth, 600, 606
Chesterfield, Lord, 27
Child, R. W., 250
Child of My Heart, 613
Child’s Almanac, A, 392
Children of the Battlefield, The, 452
Chip of the Old Block, A, 193
Christmas at Sea, 510
” in India, 634
” Present for a Lady, A, 137
Christmas Ring, The, 348
Cicely, 332
Clarence, The Dream of, 501
Clark, James Gowdy, 452, 594
Classification of Selections, 113
Clearness and Precision in Speech, 85 et seq.
Clearness of Thought, 113
Coleridge, S. T., 49
Colloquial Selections, 327 et seq.
Colum, Padraic, 616
Columbus, by Joaquin Miller, 626
” Analysis of, 105
” by A. H. Clough, 340
Combat in the Arena, A, 272
Combination Sounds, 29
Co’n Pone’s Hot, When the, 397
Conversational Style, 672
Convict, The Bishop and the, 220
Cooke, Edmund Vance, 396, 404
Coolbrith, Ina, 433, 535, 538, 604, 605, 607
Cooper, Peter, 585
Copper Sin, A Son of, 262
Cornwall, Barry, 533
Coronation, 521
Correct Speech, 12
Corson, Hiram, 97, 101