2. Assume the following data for a country: total population, 500; population under 16 years of age or institutionalized, 120%; not in the labor force, 150; unemployed, 23; part-time workers looking for full-time jobs, 10. What is the size of the labor force? What is the official unemployment rate? L09.2 3. Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual unemployment rate is 9 percent. Use Okun's law to determine the size of the GDP gap in percentage- point terms. If potential GDP is $500 billion in that year, how much output is forgone because of cyclical unemployment? LO9.2 4. If the CPI was 110 last year and is 121 this year, what is this year's inflation rate? In contrast, suppose that the CPI was 110 last year and is 108 this year. What is this year's inflation rate?
2. Assume the following data for a country: total population, 500; population under 16 years of age or institutionalized, 120%; not in the labor force, 150; unemployed, 23; part-time workers looking for full-time jobs, 10. What is the size of the labor force? What is the official unemployment rate? L09.2 3. Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual unemployment rate is 9 percent. Use Okun's law to determine the size of the GDP gap in percentage- point terms. If potential GDP is $500 billion in that year, how much output is forgone because of cyclical unemployment? LO9.2 4. If the CPI was 110 last year and is 121 this year, what is this year's inflation rate? In contrast, suppose that the CPI was 110 last year and is 108 this year. What is this year's inflation rate?
Chapter1: Making Economics Decisions
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Transcribed Image Text:2. Assume the following data for a country: total population, 500%;
population under 16 years of age or institutionalized, 120; not in
the labor force, 150; unemployed, 23; part-time workers looking
for full-time jobs, 10. What is the size of the labor force? What is
the official unemployment rate? LO9.2
3. Suppose that the natural rate of unemployment in a particular year
is 5 percent and the actual unemployment rate is 9 percent. Use
Okun's law to determine the size of the GDP gap in percentage-
point terms. If potential GDP is $500 billion in that year, how much
output is forgone because of cyclical unemployment? LO9.2
4. If the CPI was 110 last year and is 121 this year, what is this
year's inflation rate? In contrast, suppose that the CPI was 110
last year and is 108 this year. What is this year's inflation rate?
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