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Question 1 In a certain country, the working-age population consists of 500,000 people. The labor force participation rate is 75% and the unemployment rate is 9%. From this information find the following: a) How many people are unemployed? b) How many people are employed? c) How many working-age people are out of the labor force? d) What percentage of the working-age population is unemployed? Question 3 Suppose that this year's money supply is $1,200 billion, nominal GDP is $6,000 billion and real GDP is $5,000 billion. (This question concerns the Equation of Exchange in the Classical Quantity Theory of Money). a) What is the price level (expressed as a percentage - i.e., as a price index)? b) What is the velocity of money? c) Suppose that velocity is constant and the economy's output of goods and services rises by 6 percent each year. If the Fed keeps the money supply constant, what will nominal GDP be next year? d) Under the conditions in c) what will happen to the price level next year? e) What money supply should the Fed set next year if it wants to keep the price level stable? f) What money supply should the Fed set next year if it wants the inflation rate to be 8 percent?

          Question 1
In a certain country, the working-age population consists of 500,000 people. The labor force participation rate is 75% and the unemployment rate is 9%. From this information find the following:
a) How many people are unemployed?
b) How many people are employed?
c) How many working-age people are out of the labor force?
d) What percentage of the working-age population is unemployed?

Question 3
Suppose that this year's money supply is $1,200 billion, nominal GDP is $6,000 billion and real GDP is $5,000 billion. (This question concerns the Equation of Exchange in the Classical Quantity Theory of Money).
a) What is the price level (expressed as a percentage - i.e., as a price index)?
b) What is the velocity of money?
c) Suppose that velocity is constant and the economy's output of goods and services rises by 6 percent each year. If the Fed keeps the money supply constant, what will nominal GDP be next year?
d) Under the conditions in c) what will happen to the price level next year?
e) What money supply should the Fed set next year if it wants to keep the price level stable?
f) What money supply should the Fed set next year if it wants the inflation rate to be 8 percent?

Question 1
In a certain country, the working-age population consists of 500,000 people. The labor force participation rate is 75% and the unemployment rate is 9%. From this information find the following:
a) How many people are unemployed?
b) How many people are employed?
c) How many working-age people are out of the labor force?
d) What percentage of the working-age population is unemployed?

Question 3
Suppose that this year's money supply is 1,200 billion, nominal GDP is6,000 billion and real GDP is 5,000 billion. (This question concerns the Equation of Exchange in the Classical Quantity Theory of Money).
a) What is the price level (expressed as a percentage - i.e., as a price index)?
b) What is the velocity of money?
c) Suppose that velocity is constant and the economy's output of goods and services rises by 6 percent each year. If the Fed keeps the money supply constant, what will nominal GDP be next year?
d) Under the conditions in c) what will happen to the price level next year?
e) What money supply should the Fed set next year if it wants to keep the price level stable?
f) What money supply should the Fed set next year if it wants the inflation rate to be 8 percent?

Added by Jennifer C.

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