1. If the economy is at full employment, what is the current unemployment rate? 2. Why might it be a problem if unemployment falls below the natural rate? 3. The price index rises from 140 to 142.45. Find the inflation rate, rounded to nearest hundredth of a percent. 4. Complete the table: Population 10,000 Employed 7200 Unemployed 300 Labor Force Not in Labor Force Unemployment Rate Labor Force Population Rate New Questions 5. Use the information below to answer the following: Year 1 (Base Year) Good Quantity Price Spending Beef 100 $4 $400 Chicken 100 $3 $300 Total Spending $700 Good Price Spending Beef $5 Chicken $3 Total Spending Year 2 Price Index: 6. In the previous question, consumers are switching from beef to chicken due to the rising price of beef. Recalculate the price index using the new quantities (even though we should never do this). Year 2 Good Quantity Price Spending Beef 50 $5 Chicken 150 $3 Total Spending