Which of the Following Would Cause the Unemployment Rate as Measured

question 4

Multiple Choice

Which of the following would cause the unemployment rate as measured by Statistics Canada to understate the true degree of joblessness in the economy?

• A) people employed in the underground economy
• B) unemployed persons who falsely report themselves as actively looking for a job
• C) retired people who have no intention of returning to work
• D) people with part-time jobs who would prefer to be working full time

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Definitions:

Nominal Rate

The interest rate before adjustments for inflation, as opposed to the real rate, which is adjusted for the effects of inflation.

Expected Rate

The anticipated yield or return on an investment during a specific period, often estimated based on historical data and future projections.

Market Segmentation Theory

A theory suggesting that the bond market is segmented on the basis of maturity and that the interest rates for each segment are determined by the supply and demand for debt within that segment.

Yield Curve

The yield curve is a graph showing the relationship between interest rates (or yields) of bonds having different maturities but the same credit quality, typically illustrating the term structure of interest rates.