Chapter 8:

Questions

1. Suppose the adult population over the age of 16 is 237.8 million and the labor force is 153.9 million (of whom 139.1 million are employed). How many people are "not in the labor force?" What are the proportions of employed, unemployed and not in the labor force in the population? Hint: Proportions are percentages.

8. What is the difference between being unemployed and being out of the labor force?

9. How do you calculate the unemployment rate? How do you calculate the labor force participation rate?

12. What happens to the unemployment rate when unemployed workers are reclassified as discouraged workers?

19. When would you expect cyclical unemployment to be rising? Falling?

26. What is frictional unemployment? Give examples of frictional unemployment.

27. What is structural unemployment? Give examples of structural unemployment.

38. Under what condition would a decrease in unemployment be bad for the economy?

Chapter 9:

Questions

1. Table 9.4 shows the fruit prices that the typical college student purchased from 2001 to 2004. What is the amount spent each year on the "basket" of fruit with the quantities shown in column 2?

8. If inflation rises unexpectedly by 5%, would a state government that had recently borrowed money to pay for a new highway benefit or lose?

9. How should an increase in inflation affect the interest rate on an adjustable-rate mortgage?

13. What is the difference between the price level and the rate of inflation?

16. What has been a typical range of inflation in the U.S. economy in the last decade or so?

18. What is deflation?

30. Who in an economy is the big winner from inflation?