10.The given inflation rates is 7%. According to Rule 70, how many years it takes for the inflation rates to double?

Answer:.............................................................

11.Inflationis said to reduce the value of money. Given Ynominal =$10,000, and theCPIchanges infrom 115 to 120. Find the Yreal.

Answer:..........................................................

12.Cyclical unemployment occurs at the ............................stage of the business cycle.

13.What type of unemployment that occurs at full-employment stage?

Answer: .......................................

14.If real GDP for 2003 is $6400 billion and real GDP for 2004 is $6720 billion (in 2003 dollars), then the growth rate of real GDP is............................

The country of Old Jersey produces milk and butter, and it has published the following macroeconomic data, where quantities are in gallons and prices are dollars per gallon.

Product

Year 1

Year 2

Quantity

Price ($)

Quantity

Price($)

Milk

Butter

500

2000

2

1

900

3000

3

2

15.Between Year 1 and Year 2, nominal GDP grew by how many percent?

16.If the price index last year was 1.0 and today it is 1.4, what is the inflation rate over this period?

You are given information on the consumer price index (CPI). The values given are those for December 31 of each year.

YearCPI

2010126.1

2011133.8

2013137.9

2014141.9

2015145.8

17.In which year was the inflation rate the highest?

18.What happen to output produced, employment and price level as the economy moves from year 2010 to 2015?

Answer the questions 19-21 on the basis of the following information about the hypothetical economy of Seychile. All figures are in millions.

Refer to the table given;

19.The labor force in Seychile is........................

20.The unemployment rate is............................

21.If the unemployment rate is 9 percent and the natural rate of unemployment is 5 percent, then the value of cyclical unemployment is....................

22.Assume that Kyle is temporarily unemployed because he has voluntarily quit his job with company A and will begin a better job next week with company B. Kyle will be considered under................... type of unemployment.

23.Assume the natural rate of unemployment in the U.S. economy is 5 percent and the actual rate of unemployment is 9 percent. According to Okun's law, the negative GDP gap as a percent of potential GDP is........................

Given the following information.

24.If actual GDP is less than potential GDP, what does it mean?

25.Based on the given information, the size of GDP gap (as a percent of potential GDP) for the above economy is....................

[END OF QUESTIONS]