Macroeconomics, Inflation and Unemployment 1. Discuss HDI and GPl. c How do these metrics compare to GDP? In what ways do these alternative economic measures attempt to address shortcomings of GDP? Which do you think are more useful or realistic the traditional or alternative measures? Why? Compare and contrast these indices both in Canada and in terms of other countries. Where do you notice the largest oonvergences and divergences? What conclusions can you draw from this information? 2. Using the formulas for Unemployment rate and participation rate, calculate the followtng and check your answers. Hint - you need to calculate the number of unemployed before you can calculate the rates. Year 1970 1981 1984 1991 2001 2009 2016 Population (1000's) 21,182 24,221 24,978 21,533 24,419 27,202 29,587 Civilian Labour Force (CLF) (1000's) 8.395 11,830 12,282 14,336 16,094 18,250 19,440 Participation Employed Unemployed Rate (1000's) 7,919 10,933 10,932 12,857 14,932 16,727 18,079 (U) (PR) 1%) (%) 3. The table below shows data on CPI for a hypothetical timeline. Calculate the value (purchasing power) of each dollar in each year. Purchastng Power Year CPI alyear7 Prices 1 58.5 2 62.9 3 67.9 4 73.9 5 80.7 6 88.9 7 100.0 35 1.00 8 110.8 9 117.2 10 122.3 11 127.1 12 132.4 13 138.2 14 143.8 4. Why do some economists believe that it may be necessary to live with a certain amount of inflation in order to keep the unemployment rate at a low level? A V