ECON 1BB3 Lecture Notes - Lecture 8: Aggregate Supply, Weather-Related Cancellation, Real Wages

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ECON 1BB3 Lecture 5-6: Unemployment and Inflation/Economic Growth and Aggregate
Supply
Updates
- Early-write request forms are due the night of February 27
- If tonight is a snow day, it is pushed by 24 hours
- Test is held on March 9th
o Covers chapters 6-10
Question 1
- Which of the following is included in the “not in the labour force”?
o Emily a high school student, age 14
o Roger bank robber who is currently in prison
o Sue an electrician on a temporary layoff
o James a retiree who volunteers
- The answer is James
Determining who is “Not in the labour force”
- Calculating who is an isn’t in the labour force
- Everyone in Canada is part of the population
o Within that population, is the adult population
This excludes Emily
o Within that is the Adult non-institutional civilian population
This excludes Roger
Divided into three categories
Employed
Unemployed this is Sue
Not in the labour force
Question 2
- If the government increases the minimum wage from $11.40 to $15 per hour, will this
policy change lead to unemployment in corporate lawyers?
o No
o To answer the question, it is necessary to know what the equilibrium is
o For high schoolers, it is likely that they earn less than $15 per hour
o So if minimum wage is raised, corporate lawyers are still making equilibrium
wage because it is significantly higher than the numbers being discussed
Question 3
- Flora received a 4% increase in nominal wage. Over the year, inflation runs around 7%.
Which of the following describes how her nominal and real wages were affected?
a. Both nominal and real wage decreased
b. Both increased
c. Nominal wage decreased and her real wage increased
d. Flora’s nominal wage increased, and her real wage decreased
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