A Study Attempts to Investigate the Role of the Various

question 44

Essay

A study attempts to investigate the role of the various determinants of regional Canadian unemployment rates in order to get a better picture of Canadian aggregate unemployment rate behavior. The annual data (1967-1991)is for five regions (Atlantic region, Quebec, Ontario, Prairies, and British Columbia), and four age-gender groups (female and male, adult and young). Focusing on young females, the authors find significant effects for the following variables: the regional relative minimum wage rate (minimum wages divided by average hourly earnings), the regional share of youth in the labor force, the regional share of adult females in the labor force, United States activity shocks (deviations of United States GDP from trend), an indicator of the degree of monetary tightness in Canada, regional union density, and a regional index of unemployment insurance generosity. Explain why the authors only used region fixed effects. How would their specification have to change if they also employed time fixed effects?

Distinguish between households and firms in the context of the circular flow.

Recognize the flow of resources, goods, services, and money in the economy.

Understand the concepts of positive and normative statements in economics.

Differentiate between statements of fact (positive statements) and statements of opinion or policy (normative statements).

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Definitions:

Methodological Rigor

The strict adherence to and application of meticulous and systematic strategies for conducting research or analysis.

End-Goal

The ultimate outcome or objective that a person or organization is aiming to achieve.

Investigative Expense

The costs incurred during the process of examining or researching something thoroughly, often for legal or business purposes.

Credible Sources

Refers to information or data that is reliable and trustworthy, often verified by reputable authority or evidence.