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Exam 9: Business Cycles, Unemployment, and Inflation

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Question 1

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If the population is 26.7 million,the labour force is 13.6 million,and the number measured as unemployed is 0.68 million,what is the rate of unemployment?

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Divide 0.68 million by 13.6 mi...

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Question 2

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Explain the difference between nominal and real interest rates.

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Nominal interest rates are the stated ra...

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What is meant by the term business cycle? List the four phases of the business cycle.

"Inflation is a harsh and arbitrary form of taxation." Do you agree? If so,who pays this tax?

Evaluate the statement: "Anticipated inflation is not too much a problem."

Explain the difference between real and nominal income.How can you get an approximation of the percentage change in real income from one time period to another?

What are two criticisms of the unemployment rate? How do these criticisms relate to the overstating or understating of the unemployment rate?

What is inflation and how is it measured?

In the table below are statistics showing the labour force and total employment in month 1 and month 2 of the same year.Make the computations necessary to complete the table.

Describe cost-push inflation and its major source.

What is "demand-pull" inflation?

Assume that nominal income is $35,000 and the price index is 1.20 in year 1.In year 2,nominal income rises to $38,000 and the price index rises to 1.25.What was the percentage change in real income from year 1 to year 2? What was the absolute amount of increase in real income? Make your calculations of the percentage change in real income and the absolute change in real income using the approximation formula and using the more precise method with index numbers.

How has the rate of inflation in Canada changed in the past five decades?

How is the unemployment rate affected if employment increases from 9 million to 9.5 million and the labour force increases from 10 million to 11 million?

Why might the unemployment rate increase when the economy moves into its recovery phase?

Explain the concept of Core Inflation

Which types of industries are hit hardest by a recession? Explain.

Inflation is frequently described as "too much money chasing too few goods." Is this an acceptable definition?

Answer the next four questions based on the following data using year 1 as the base year.All dollars are in billions.

Discuss the unequal burden of unemployment for different demographic groups in Canada.