1. Examine the following statistics about the economy and answer the questions below:

Unemployment rate: 5.7%

Labor force participation rate: 71.7%

Number of unemployed: 10 million

Work-eligible population: 244 million

a. How many people are in the labor force?

b. How many people are employed?

c. How many people are not in the labor force?

2.Explain why it makes sense that the equation of exchange, M V = P Y, would be true by definition.

3.Explain the thinking behind Milton Friedman's famous declaration that "inflation is always and everywhere a monetary phenomenon."

4.Although the measured U.S. savings rate is falling, the actual rate may not be falling, but, in fact, might even be rising. Why?