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Chapter 7: Q12 - Problems (page 142)
The real interest rate is 4 percent, and the nominal interest is 6 percent. What is the anticipated rate of inflation.
Inflation
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Russian government economists follow the U.S. example of publishing a measure of "core inflation" in which food and energy prices are stripped from the consumer price index before computing annual inflation rates. Why do you think that Russian "core inflation" is lower than the annual rate of change in the Russian CPI including food prices?
Suppose you are given the following information:
a. What is the total population?
b. How many people are unemployed, and what is the unemployment rate?
c. What is the labour force participation rate?
Suppose that you are given the following information:
a. If the labour force participation rate is 65 per cent, what is the labour force?
b. How many workers are employed?
c. What is the unemployment rate?
Why do you suppose that some economists argue that if part-time employment rises while unemployment remains unchanged, the economy has moved further from full employment?
In 2016, the cost of a market basket of goods was \(2,000. In 2018, the cost of the same market basket of goods was \)2,100. Use the price index formula to calculate the price index for 2018 if 2016 is the base year.
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