d. the monthly survey of Canadian households found 37,000 more people at work in
ID: 1131286 • Letter: D
Question
d. the monthly survey of Canadian households found 37,000 more people at work in Februrary than in January, but many of the new jobs were only part time.
i.does the creation of part time jobs affect unemployment in the same way as the creation of full time jobs?
ii.what can you sayabout what has happend to the unemployment rate from this informatoin?
e. according to the latest statistics, housing starts are up, indicating unexpected strength in the economy. bond prices fell on the news...what are the two main explanations developed in this course for why bond prices would fall on this news?
f. bytying the pay of the governer of the central bank to his success in keeping inflationbelow 2 per cent, New Zealand has succeeded in keeping inflation low. now there are calls to tie the pay of the minister of employment to his success in keeping unemployment below 2 percent.
i.how would the governor of New Zealnad's central bank have kept inflation low to protect his pay?
ii. comment on the wisdom of the suggestions in the second sentence.
Explanation / Answer
i) Part time employees who work for at least 30 hours in a week are considered as employed. Thus the creation of part time jobs affect unemployment in the same way as the creation of full time jobs.
ii) As 37000 more people are at work in February than in January and got part time job opportunities, so the rate of unemployment has reduced.This is because part time employees are also considered as employed people.
e. As the housing starts are up, people will invest more in the purchasing of houses and take the money out of the bonds.As the demand of bonds fall,so the price of bonds also fall.
Investment done by the people in the bonds would be taken away and there is less demand of bonds. As a result the price of bonds fall.
f. i) Inflation can be kept low by the governor of New Zealand's bank by :
ii) there are calls to tie the pay of the minister of employment to his success in keeping unemployment below 2 percent.
This is a wise suggestion, as the pay of the employment minister is tied to his success of keeping unemployment below 2 %. Thus the minister of employment would try to keep the unemployment low as his his pay is directly linked to it.
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