1. Over the period of a year, the annual rate of inflation falls from 6% to 5%. Which statement is correct? Select one:

a.Prices have fallen by 1%

b.The economy is continuing to expand and unemployment is expected to decrease.

c.The purchasing power of money has increased

d.The cost of living has increased

2 The cost of unemployment can be measured by the: Select one:

a. amount by which actual GDP exceeds potential GDP.

b.excess of real GDP over nominal GDP.

c.excess of nominal GDP over real GDP.

d.amount by which potential GDP exceeds actual GDP.