Question 1

Suppose more men decided to stay at home and raise their pre-school aged children. We would expect:

a. The labor force participation rate for males is increasing.

b. The labor force participation rate for males is decreasing.

c. The labor force participation rate for males to remain the same.

d. The impact on the labor force participation rate for males to be unpredictable.

Question 2

The total population (aged 16 and older) of Pageland is 48 million. Of this total, 4 million are unemployed and 36 million currently hold jobs. What are the rates of unemployment and labor force participation of Pageland?

a. The rate of unemployment is 11 percent, and the labor force participation rate is 83 percent.

b. The rate of unemployment is 10 percent, and the labor force participation rate is 75 percent.

c. The rate of unemployment is 10 percent, and the labor force participation rate is 83 percent.

d. The rate of unemployment is 11 percent, and the labor force participation rate is 90 percent.

Questions 3

Which of the following are consequences of unemployment?

a. A rising price level, which reduces the purchasing power of consumers.

b. A rising aggregate output and income.

c. An increase in the money supply which increases inflation.

d. A decline in output and income.

Question 4

Refer to the information given as below find:

1. The Nominal GDP for each year.
2. The Real GDP for each year.
3. The GDP Deflator for each year. Using 2016 as a base year.

Year	GOOD 1	GOOD 2
P	Q	P	Q
2016	20	350	30	450
2017	25	460	40	550
2018	30	520	50	650

Question 5

Refer to the information given below find:

ComputeThe GDP Deflator for each year

Using 2016 as a base year.

Year	GOOD 1	GOOD 2
P	Q	P	Q
2016	20	260	30	420
2017	55	380	35	550
2018	65	750	75	700

Question 6

CPI basket: {15# beef, 30# chicken}

price of beef

price of chicken

2016	$6	$6
2017	$8	$8
2018	$12	$8

1. Compute the CPI in each year. Using 2016 as a base year.
2. What was the CPI inflation rate from 2017-2018?

Question 7

CPI basket: {15 # beef, 30 # chicken}

	price of beef	price of chicken
2016	$6	$6
2017	$8	$8
2018	$12	$8

1. Compute the CPI in each year. Using 2016 as a base year.
2. Compute the inflation rate for each year.

Question 8

CPI basket: {15 # beef, 30 # chicken}

price of beef

price of chicken

2016	$6	$6
2017	$8	$8
2018	$12	$8

In 2016-2017 Households bought CPI baskets, in 2018: Households bought{7 # beef, 40 # chicken}.

Compute cost of the 2017 household basket.

Compute % increase in cost of household basket over 2017-2018, compared to CPI inflation rate.