Exam 1 Formulas

Question 1

CPI=

Answer 1

(Price of basket year current year/price of basket in previous year) x 100

Question 2

Inflation rate formula =

Answer 2

(CPI current year-CPI base year)/CPI base year x 100

Question 3

If deflation happens…

Answer 3

Real income goes up

Question 4

Percentage change in prices=

Answer 4

(CPI current year - CPI base year)-(CPI base year) x100

Question 5

Unemployment rate =

Answer 5

Number of unemployed persons / employed + unemployed

Question 6

Employment rate =

Answer 6

Number of employed persons / Civilian no constitutional population (not in labor force + unemployed + employed)

Question 7

Frictional unemployed =

Answer 7

of frictional unemployed persons /civilian labor force

Question 8

Structural unemployment =

Answer 8

structurally unemployed persons / civilian labor force

Question 9

Natural unemployment =

Answer 9

Structural rate of employment + functional rate of employment

Question 10

Real income =

Answer 10

(Nominal income/CPI)x100

Question 11

Percentage change in real income =

Answer 11

Percentage change in income - percentage change in the inflation rate