Q1. Assume the following data for a country:

Category

Number of people

(millions)

Total population

500

Population under 15 years of age or institutionalized

120

Not in labor force

140

Unemployed

24

Part-time workers looking for full-time jobs

10

Solve the following questions. Show the calculations

A.What is the size of the labor force?(1Marks)

B.What is the official unemployment rate?(2Marks)

Q2.Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate of unemployment is 9 percent. Use Okun's law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500 billion in that year,

How much output is being forgone because of cyclical unemployment?

Show the calculations (2 Marks)

Q3.If the CPI was 140 last year and is 168 this year,

A.What is this year's rate of inflation?

Instructions: Round youranswer to two decimal places.

Show your calculations(2Marks)

B.In contrast, suppose that the CPI was 140 last year and is 134 this year. What is this year's rate of inflation?Instructions: Round youranswer to two decimal places. Show your calculations.(2Marks)

C. What term do economists use to describe this second outcome?(1Mark)