Q31. Answer all the following questions.

a. The Bureau of Labor Statistics counts as employed people who work part-time, but would prefer to work full-time. Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as partially unemployed. Explain how the unemployment rate and the labor force participation rate would change. (3pts)

b. Japan experienced periods of deflationa declining price levelduring the 1990s. During a deflationary period, which would be higher: nominal GDP or real GDP? Why? Assume that the base year of choice is prior to the deflationary period. (3pts)

c. Suppose you obtain a fixed rate mortgage during a period of relatively high inflation. During the next ten years, inflation falls. Did you gain or lose from the lower inflation rate? Explain why. (3pts)