Question 1. (2 points) According to the Phillips Curve trendline or its equation, at what unemployment rate will the change in the inflation rate equal zero? This is an estimate of the unemployment rate at potential output. (Type answer as a percent, that is, 6.5 not 0.065. Use 1 decimal place. Don't use a "%" or a "+" sign.)

Question 2. (1 point) True/False. According to the Phillips Curve trendline or its equation, the unemployment rate at potential output is close to 5% (within +/- 0.5 points).

Question 3. (2 points) According to the Phillips Curve for 1987-2010, what should have happened to inflation in the year 2019?

a. the core inflation rate should have increased from 2018 to 2019.

b. the core inflation rate should have decreased from 2018 to 2019.

Question 4. (2 points) True/False. The Phillips Curve for 1987-2010 correctly predicted the change in the core inflation rate from 2018 to 2019.

Question 5. (2 points) According to the Okun's Law trendline or its equation, how fast must real GDP grow in order to hold the unemployment rate constant from one year to the next? (Type answer as a percent, that is, 1.5 not 0.015. Use 1 decimal place. Don't use a "%" or a "+" sign. Don't use a "-" sign because your answer won't be negative?that's a hint!)

Question 6. (3 points) Which of the following is true?

a. The 1987-2010 Okun's Law trendline says that the unemployment rate should have decreased or remained the same in each year from 2011 to 2019, but in fact unemployment increased in each of those years.

b. The 1987-2010 Okun's Law trendline says that the unemployment rate should have increased or remained the same in each year from 2011 to 2019, and in fact unemployment increased in each of those years.

c. The 1987-2010 Okun's Law trendline says that the unemployment rate should have decreased or remained the same in each year from 2011 to 2019, and in fact unemployment decreased in each of those years.

d. The 1987-2010 Okun's Law trendline says that the unemployment rate should have increased or remained the same in each year from 2011 to 2019, but in fact unemployment decreased in each of those years.

\fInterest Rate Data (percentage rates) Money Supply (billions of dollars) Employment Data (thousands of people) Labor Employ- Corporate 10-year 1962 30.3 31.4 5.02% 1962 146.5 1962 0,619 3,918 71,812 1963 156.8 1964 73,077 3,776 32.3 4.83% 74,424 1965 4.87% 196 4.92% 1966 171.0 1966 75,745 2,867 33.5 7,348 74,376 2,972 34.7 5.51% 6.23% 5.07% 1967 132,027 2,797 36.3 6.18% 6.94% 5.65% 1968 190.1 80,705 7,875 2,830 38.4 7.03% 6.67% 1969 201.4 9.11% 1970 4,127 970 38.8 40.8 1.04% 7.35% 1970 140,216 84,376 79,355 5,022 1971 .56% 6.16% 1971 1972 6.21% .43% 1972 1972 1972 .21% 1973 45.6 1973 6.84% 1973 1973 1974 49.3 1975 1975 98,825 1979 372.5 1979 164,865 1980 395.7 1980 7,671 1980 80.8 424.8 1981 170,130 08,676 8,276 10.9 89.2 1981 198 1982 198 452.7 6.5 00,822 10,694 1983 99.6 1983 111,515 19.6 1984 103.9 104.5 14.19% 1984 538.4 113,532 3,313 07.6 109.1 8.10 1985 587.0 3,245 9.02% 7.68% 1986 180,587 1986 09.7 13.5 0'999 9.38% 8.38% 1987 743.6 1987 7.414 1987 118.2 114,974 6,697 198 118.3 123.4 198 774.4 6,524 1989 123.9 129.0 198 8.50% 198 1989 1990 130.7 135.5 990 10.36% 8.55% 1991 142.1 .77% 7.86% 1992 147.3 1992 .14% 26,720 7,231 203, 133 1997 5.46% 199 1998 205,220 1998 173.4 1998 5 ,879 199 177.0 199 1, 102.0 142,586 36,901 5,685 2000 172.2 181.3 200 8.36% 6.03% 2000 1, 104.5 2000 212,577 143,769 6,830 2001 177.0 7.08% 5.02% 2001 1, 139.6 2002 144,856 8,375 2002 179.9 6.49% 7.80% 2002 8,770 184.0 193.2 .67% 5.77% 4.02% 200 1,274.0 196.6 6.39% 2004 8,140 2004 1,344.0 7,579 195.3 200.9 6.06% 2005 1,372.2 2005 205.9 2006 2006 6,991 201.6 1,375.4 207.3 ;.48% 4.63% 2007 2007 215.3 215.6 5.63% 2009 14,295 2009 .31% 2010 221.3 2,006.9 9,602 2,814.6 237.0 2015 3,020.1 157, 140 2016 2017 6,976 2017 245.1 2.33% 2017 3,521.9 2018 257,791 6,306 2018 251.1 257.6 2018 3.93% 2.91% 2018 3,675.5 157,507 6,000 2019 2019 2019Exchange Rate Data (currency unit per one U.S. dollar) Median Exch Rate Exch Rate Exch Rate Exch Rate Exch Rate Family Gasoline Total Canada Min. Wage Price/Gal Year Dollar Yuan Yen Pound Year (thousands) 1960 0.356 1960 1.00 5,620 180,760 1961 1.05 183,742 1.583 1962 1.15 1963 1.579 361.5 0.357 963 1.22 6,24 189,300 1964 1.25 191,927 1965 1.078 0.358 1965 1.25 0.312 194,347 1.25 96,599 1967 1.079 1.579 1967 1.39 198,752 1968 1968 1.58 8,632 200,745 1969 1.077 1.554 0.418 1969 1.60 9,433 970 1.044 970 9,867 10,285 207,692 1972 303.1 0.400 1972 1.60 1973 1.60 211,939 1974 0.978 0.427 1974 1.87 12,902 1975 2.10 13,71 1976 1976 2.30 218,086 1977 0.573 977 2.30 16,00 220,289 1978 1.141 1978 2.65 1979 219. 1979 2.90 225, 106 3.10 227,726 1981 0.493 1981 3.35 22,388 1982 1982 3.35 23,433 232,218 1983 .233 1.122 0.660 1983 3.35 24,580 1. 199 234,333 984 1.267 237.6 1984 3.35 26,433 1.171 236,394 1985 27,735 1.159 238,506 1986 168.5 0.682 1986 3.35 29,458 0.892 1987 0.866 3.35 1988 128.1 1988 3.35 32, 191 3.35 34,213 247,388 1990 4.795 44.8 0.560 1990 3.69 5.335 134.5 1991 4.14 35,939 1992 4.25 36,573 1.127 1993 0.666 993 4.25 36,95 260,282 4.25 1995 1.373 8.371 94.1 1995 4.25 40,611 4.38 42,300 1997 .385 121.1 1997 4.88 1.234 131.0 1998 5.15 46,737 1999 113.7 0.618 1999 5.15 48,831 1.165 279,328 2000 1.486 0.660 2000 5.15 50,73 282,398 1.549 5.15 2002 1.570 2002 5.15 287,955 0.883 5.15 52,680 108.2 0.546 5.15 54,061 293,262 110.1 2005 5.15 56, 194 2006 5.15 58,407 0.500 2007 5.54 $1,355 2008 6.948 2008 6.24 3.266 2009 1.141 93.6 2009 6.85 60,088 7.25 50,236 309,780 2011 6.463 79.7 2011 7.25 2012 7.25 62,241 2013 1.030 97.6 0.640 2013 7.25 65,471 2014 7.25 66,63 2015 7.25 70,697 2016 .326 0.738 2016 7.25 72,707 2017 7.25 76, 135 325,410 2018 110.4 0.750 2018 7.25 78,646 327,436 2019 109.3 2019 7.25 81,490 2.629 329,434