1. In any given year, nominal GDP increases by about 7%, but real GDP decreases by 2%. Which of the following explanations is the most probable? A) Prices fell 2%. B) Prices have increased by 9%. C) Prices fell 9%. D) Production increased by 2%. E) Prices increased by 7%. Answer:B 2. Which of the following people would be counted as unemployed in Cnada? A) Ilias is a college student with a job. B) Mamadou lost his job a month ago but has not actively sought new employment as he is awaiting severance pay from his former employer. C) Marie has stopped looking for work after a month of fruitless search. D) Two months ago, Vlad lost his job when his employer went bankrupt and decided to go back to school. E) Ndeye does not work, but she is looking for a full-time job. Answer:E 3. Suppose the working age population is 100 people. If 25 of these people are not in the labor force, is equal to A) the unemployment rate; 33% B) the employment rate; 25% C) the labor force; 75 people D) the employment rate; 75% E) unemployment rate; 25% Answer: C