6. Assume the CPI was 100 in 2012, and 125.2 in 2019.

a)By what percentage did prices rise over the period from 2012 to 2019?

Answer _______________ % (2 marks)

b)If Jan's wage at ABC Innovation was $60,000 in 2012 and it had increased to $80,00 by 2019, what was Jan's "real" wage in 2019 relative to what she was earning in 2012 after adjusting for inflation? (2 marks)

7. Identify which unemployment condition (seasonal, structural, cyclical, frictional) best describes the situation of each of the following individuals. (1 mark each)

a)a wristwatch repairman that was laid off as most people use their cell phone to check the time and few people are buying watches worthwhile repairing. _________________ unemployment

b) a farm worker who is unemployed during the winter months. ________________ unemployment

c) a digital artist who lost her job with an advertising company during a recession in the economy. ________________ unemployment

d) a marketing manager who quit her job to look for another similar marketing job which provides a higher salary and more benefits. ___________________ unemployment

8. Assume that the natural rate of unemploymentfor Canada in 2019 was 5.7% and that the actual rate of unemploymentin 2019 was 8.5%. Note that the natural rate of unemployment is made up of three types of unemployment and the actual rate of unemployment is made of those three types of unemployment, and one additional type.

a) What is the type of unemployment that is not includedin calculating the natural rate of unemployment but is includedin calculating the actual rate of unemployment? (2 marks)

b) Based on the above information, what is the rate of unemployment the type of unemployment you identified in a) above is responsible for? (2 marks)

9. Using the Bank of Canada's Inflation Calculatorat the site shown below, calculate what would be the value in 2019 of a house in Toronto that cost $15,000 in 1964. Assume that over those years the house increased in value each year at the rate of inflation. (2 marks)

Note: Instructions on how to use the Inflation Calculator are provided at the site.

Value in 1964: $ 15,000

Value in 2019: $ __________________