Exam 9: Part A: Business Cycles, Unemployment, and Inflation

Answer the next four questions based on the following data using year 1 as the base year.All dollars are in billions. (a) Find real income in year 4.(b) What was the percentage rise in prices between years 1 and 3? (c) What was the percentage rise in prices between years 2 and 4? (d) What was the increase in real income from year 3 to year 4 in %?

Inflation is frequently described as "too much money chasing too few goods." Is this an acceptable definition?

How does inflation affect the economy's real level of output and why does output change in this way?

Some economists believe that moderate inflation cannot be accepted because a gradual increase in prices leads to an ever-rising rate of inflation.Other economists argue that in order to achieve rapid economic growth, some moderate price increases are necessary, and that rigid price stability would cause considerable unemployment.Contrast and evaluate these two points of view.

How has the rate of inflation in Canada changed in the past five decades?

According to most economists, what is the immediate cause of the business cycle? Give an example of how this causes expansion and contraction in the business cycle.

Discuss the unequal burden of unemployment for different demographic groups in Canada.

In the table below are statistics showing the labour force and total employment in month 1 and month 2 of the same year.Make the computations necessary to complete the table.

Evaluate the statement: "Anticipated inflation is not too much a problem."

Evaluate the statement: "Inflation only benefits the rich."

Explain the differences among the frictional, structural, cyclical, and seasonal forms of unemployment.

How is the unemployment rate affected if employment increases from 9 million to 9.5 million and the labour force increases from 10 million to 11 million?

The table below shows the price index in the economy at the end of four different years. (a) What is the rate of inflation in years 2, 3, and 4? (b) Using the "rule of 70," determine how many years would it take for the prices to double at each of these three inflation rates?

Use the following data to calculate: (a) the size of the labour force and (b) the official unemployment rate.Total population 1,500; population under age 15 and institutionalized, 360; not in labour force, 450; unemployed, 69; workers with part-time jobs who are looking for full-time jobs, 30.

Explain the concept of Core Inflation

"The increasing importance of durable goods has made our economy more vulnerable to cyclical fluctuations." Explain and evaluate.

What is inflation and how is it measured?

What is meant by the term business cycle? List the four phases of the business cycle.

What phase of the business cycle is the Canadian and your provincial economy experiencing at the present time? Justify your answer.

Describe and explain the specter of deflation.