1. Canada and the United States had approximately the same aggregate unemployment rates from the 1920s to 1981. In 1982, a two-percentage point gap appears, which has roughly persisted until today, with the Canadian unemployment rate in the third quarter of 2002 being 7.6 percent while the American rate stood at 5.9 percent in the same period. Several authors have investigated this phenomenon. One study, published in 1990, contained the following statement: "It is a clich that, as compared to analysis in the physical sciences, economic analysis is hampered by the lack of controlled experiments. In this regard, study of the Canadian economy can be much facilitated by comparison with the behavior of the US ..."
   1. Discuss what the authors may have had in mind, explain what the study might have looked like and whether it would be a true experiment or a quasi-experiment. (2 points) [C8, P1]
   2. Evaluate the study and list some potential threats to a) internal and b) external validity when comparing aggregate unemployment rate behavior between countries. (4 points) [C8, P2]