QUESTION 2 (30 MARKS)

You are watching national news with your roommate. The news anchor says, "unemployment statistics release by Department of Labor today show an increase in unemployment from 6.1 percent to 6.2 percent. This is the third month in a row where the unemployment rate has increased." Your roommate says, "Every month there are fewer and fewer people with jobs. I don't know how much longer the country can continue like this."

a.Can your roommate's statement be deduced from the unemployment rate statistic? Why?

(20 marks)

b.What information would you need to determine whether there are really fewer people with jobs?

(10 marks)

QUESTION 3 (20 MARKS)

Are union good or bad for the economy. Justify and explain your answer.

(20 marks)

QUESTION 4 (10 MARKS)

Is there a policy that can immediately reduce both inflation and unemployment? Explain your answer.

(10 marks)