1. What are the four phases of the business cycle? How long do business cycles last? How do seasonal variations and long- run trends complicate measurement of the business cycle? Why does the business cycle affect output and employment in capital goods industries and consumer durable goods industries more severely than in industries producing consumer nondurables? [Lo9.1] 2. How can a financial crisis lead to a recession? How, in general, can a major new invention lead to an expansion? [LO9.1] 3. How is the labour force defined and who measures it? How is the unemployment rate calculated? Does an increase in the unemployment rate necessarily mean a decline in the size of the labour force? Why is a positive unemployment rate- more than zero percent-fully compatible with full employment? [Lo9.2] 4. How do unemployment rates vary by gender, occupation, and education? Why does the average length of time people are unemployed rise during a recession? [Lo9.2] 5. Why is it difficult to distinguish between frictional, structural, seasonal, and cyclical unemployment? Why is unemployment an economic problem? What are the consequences of a negative GDP gap? What are the noneconomic effects of unemployment? [Lo9.2] 6. Even though Canada has an employment insurance program that provides income for those who are out of work, why should we worry about unemployment? [Lo9.2] 7. What is the Consumer Price Index (CPI) and how is it determined each month? How does Statistics Canada calculate the rate of inflation from one year to the next? How does inflation affect the purchasing power of a dollar? How does it explain difference between nominal and real interest rates? How does deflation differ from inflation? [L( ).3]