All calculations should be rounded off to one decimal place.

1) Given the following information for a country:

Total Population: 45,000,000

Labour Force Population: 38,000,000

Not in the Labour Force: 7,000,000

Labour Force: 31,000,000

Employed:___________

Unemployed: 4,000,000

a) How many people are in the Employed category? (2 mark) ___________________

b)Calculate the Unemployment Rate. Show calculations. (2 mark) Show work.

c) Calculate the Labour Force Participation Rate (2 mark) Show work.

2) Calculate the inflation rate experienced in 2014 and 2015 given the CPI for each year below: (2 marks each) Show work.

Year

CPI (as of December 31 of the year)

Inflation rate (%)

2013

124.5

Not applicable for 2013

2014

125.2

?

2015

127.5

?

3) Calculate the nominal GDP and real GDP for the years shown. Assume that the economy only produces one product (microchips). The base year is 2016. Current price refers to the price obtained for each microchip in the year produced. (1 mark each blank)

Year

Production output of computer

microchips

Current prices

Total value of output at current prices

(Nominal GDP) $

Total value of output at 2016 prices

(Real GDP)

$

2016

1,000

$0.20

200

200

2017

2,000

$0.30

2018

2,500

$0.40

4) Assume the CPI (Consumer Price Index) basket of goods and services was 104.7 in 2004, and 125.2 in 2014.

a)By what percentage did prices rise over the period from 2004 to 2014?

Answer (to one decimal place) _______________ % (2 marks)

b)Jan's wage at ABC Innovation was $60,000 in 2004 and had increased to $70,00 by 2014. What was Jan's "real" wage in 2014 relative to what she was earning in 2004 after adjusting for inflation? (2 marks)

5) 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

6) Using theBank of Canada Inflation Calculatorat the site shown below, calculate what would be the value in 2018 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 2018: $ __________________

Bank of Canada site -https://www.bankofcanada.ca/rates/related/inflation-calculator

TOTAL: 26 marks