BUSINESS CYCLES, UNEMPLOYMENT, AND INFLATION WORKSHEET   This question explores the calculation of the unemployment rate

BUSINESS CYCLES, UNEMPLOYMENT, AND INFLATION WORKSHEET

This question explores the calculation of the unemployment rate. You will be provided some imperfect employment data for four different countries and asked to identify the unemployment rate.

Task 1: The population of Asartaland is 95. Of these 95 individuals, 75 are in the labor force and 65 are employed. What is the unemployment rate in Asartaland?

Task 2: The population of Millsville is 130. Of these 130 individuals, 90 are in the labor force and 20 are unemployed. What is the unemployment rate in Millsville?

Task 3: The population of the Republic of Butters is 165. Of these 165 individuals, 130 are in the labor force and 25 are unemployed. What is the unemployment rate in the Republic of Butters?

Task 4: The population of Arctica is 30. Of these 30 individuals, 20 are in the labor force and 17 are employed. What is the unemployment rate in Arctica?

Task 5: Suppose, in the base year, a typical market basket purchased by an urban family cost $250. In Year 1, the same market basket cost $950. What is the consumer price index (CPI) for Year 1? If the same market basket cost $1000 in Year 2, what is the CPI for year 2? Calculate the rate of inflation between year 1 and year 2.