1. Define unemployment and the unemployment rate.

* 2. Categorize some as employed, unemployed, or not in the labor force.

3. Calculate the unemployment rate.

4. Define discouraged workers and underemployment.

5. Discuss the issues in using unemployment as an economic indicator

6. Interpret the unemployment rate and other labor market statistics.

7. Describe the causes of unemployment.

* 8. Distinguish between frictional, structural, and cyclical unemployment

9. Examine policies that can increase or decrease structural unemployment.

10. Define full employment, natural unemployment rate, and potential GDP.

11. Identify the factors that determine the size of the natural rate of unemployment.

12. Define the term output gap. 13. Identify the effect (costs) of Unemployment.*

14. Discuss the factors affecting the labor force participation rate

1. Define inflation, deflation, and disinflation.

* 2. Describe the Consumer Price Index (CPI) and how it is used to measure inflation

3. Calculate the rate of inflation.

4. Interpret the rate of inflation*

5. Define core CPI and explain its purpose

6. Identify the bias in the CPI.

7. Calculate the real price of a good and compare real prices over time

8. Convert nominal variables into real variables.

1. State the equation of exchange

2. Explain the assumptions and predictions of the quantity theory of money.

3. Define the term velocity of money.

4. Use the quantity theory of money to explain the cause of large, sustained inflation over the long run.

5. Summarize the cause of inflation.*

6. Describe the effects (costs) of inflation; both unexpected and expected *

7. Define the term money illusion.

8. Explain money neutrality.

9. Explain the fisher effect.

10. Identify the cost of deflation and why economists suggest to avoid it.

11. State and explain economists' view of "preferred inflation"