HOMEWORK # 4 Unemployment and Inflation #1 Consider the following simple economy that produces only 3 goods. Use the information in the following table to calculate the inflation rate for 2015 as measured by CPI (Base = 2005) PRROWEMOH THIGUTS Base Year 2005 Base Year 2005 2014 2015 Product Quantity Price Price Price Pizza 2 $ 10.00 $ 11.00 $ 16.20 Milkshakes 10 $ 2.00 $ 2.45 $ 2.40 Books 6 $ 15.00 $15.00 $ 14.00 #2 Zimmerland has following data is known Nominal interest rates in 2015 = 2.5% CP12015 = 165 CP12014 = 150 What is the real interest rate in 2015? #3 Inflation is unexpectedly higher than anyone anticipated. In this scenario would you rather be a lender or a borrower?Figure 1 Working-age population Employment Unemployment Unemployment rate 4.0% Labor force 120,000 sislustso of nollantoine air Labor force participation rate 65.0% #4 Refer to Figure 1. How many are unemployed (approximately)? sabud Inemm #5 Refer to Figure 1. How many are employed (approximately)? San trillion TR - 52 trillion