Lec6 iC Questions

Question 1

In Quebec in December, the youth (15-24) employment rate was 58.6%, while the participation rate was 63.8%
In Ontario in December, the youth (15-24) employment rate was 47.8%, while the participation rate was 56.8%

Which of the following statements is true?
a) The youth unemployment rate was higher in Quebec
b) The youth unemployment rate was higher in Ontario
c) The unemployment rates are the same

Answer 1

b) The youth unemployment rate was higher in Ontario

Unemployment Rate = ((Participation Rate - Employment Rate) / Participation Rate) X 100

Quebec:
UR = ((63.8 - 58.6)/63.8) X 100
UR = 8.1%

Ontario
UR = ((56.8 - 47.8)/56.8) X 100
UR = 15.8%

Question 2

In December, there were 2,900,600 people in Ontario aged 65 and over. Among this population the participation rate was 16.3% and the unemployment rate was 3.7% How many people in Ontario aged 65 and over were unemployed in December?
(Nearest 1,000)

Answer 2

Labour Force = Population X Participation Rate
LF = 2,900,600 X 0.163
LF = 472,798 people

Unemployed = Labour Force X Unemployment Rate
U = 472,798 X 0.037
U = 17,493 people

U = 17,000

Question 3

The consumers price index for Canada in December 2023 was 158.3. In December 2024, it was 161.2. What was the inflation rate over this year?
(Answer to 1 decimal point)

Answer 3

Inflation Rate = ((Current CPI - Previous CPI) / Previous CPI) X 100
IR = ((161.2 - 158.3) / 158.3) X 100
IR = 1.8%

Question 4

In December 2021, the all-items price index was 144.0. By December 2022, it was 153.1. In contrast, in December 2021, the “core” price index was 136.7 and by December 2022, it was 144.0

Based on this information, which of the following is true?
a) Core inflation was higher than all-items inflation in 2022
b) All-items inflation was higher than core inflation in 2022
c) Core inflation is identical to all-items inflation
d) None of the above

Bonus Question: Can you explain why this might be true?

Answer 4

b) All-items inflation was higher than core inflation in 2022

Inflation Rate = ((Current CPI - Previous CPI) / Previous CPI) X 100

“All Items” inflation
IR = ((153.1 - 144.0) / 144.0) X 100
IR = 6.3%

“Core” Inflation
IR = ((144.0 - 136.7) / 136.7) X 100
IR = 5.3%

This is because “core” inflation excludes volatile items like food and energy prices, which might have experienced significant increases in 2022, driving up the all-items inflation rate

Question 5

In December 2023, average hourly wages in Canada were $34.45, while in December 2024, the average hourly wages were $35.77
In the same time, the consumer price index increased from 158.3 to 161.2

What has been the growth rate of real wages during the year?
(Answer to 1 decimal point)

Answer 5

Real Wage Growth Rate = Nominal Wage Growth Rate - Inflation Rate

NWGR = ((Wage in 2024 - Wage in 2023) / Wage in 2023) X 100
NWGR = ((35.77 - 34.45) / 34.45) X 100
NWGR = 3.8%

IR = ((Current CPI - Previous CPI) / Previous CPI) X 100
IR = ((161.2 - 158.3) / 158.3) X 100
IR = 1.8%

RWGR = 3.8 - 1.8
RWGR = 2%

Question 6

In December 2014, average hourly wages for youth in Canada were $14.91, while in December 2024, average hourly wages were $21.73. In the same time, the consumer price index increased from 124.5 to 161.2.

What has been the average annual growth rate of real wages for youth during the last 10 years?
(Answer to 1 decimal point)

Answer 6

Today’s Dollars = Another Time’s Dollars X (Price Level Today / Price Level in Another Time)

Today’s Dollars = 14.91 X (161.2 / 124.5)
Today’s Dollars = $19.305

Growth Rate = ((Wages in 2024) / (Wages in 2014))^(1/(Number of years)) - 1
GR = (21.73 / 19.305)^(1/10) - 1
GR = 1.2%

Question 7

Is Bitcoin money in Canada?

a) Yes
b) No - because it isn’t a medium of exchange
c) No - because it isn’t a unit of account
d) No - because it isn’t a store of value

Answer 7

b) No - because it isn’t a medium of exchange
c) No - because it isn’t a unit of account

Question 8

All else equal, unexpected high levels of inflation are most beneficial to people who are:

a) Retired people with high levels of savings and no debt
b) Young people with no savings and no debt
c) Middle -aged people with jobs and high levels of debt at fixed nominal interests
d) None of the above

Answer 8

c) Middle -aged people with jobs and high levels of debt at fixed nominal interes