TOPIC 2: Inflation and Unemployment

Question 1

Human capital is

Answer 1

The knowledge and skills of workers that have economic value

Question 2

If the number of employed people in the UK is 27 million, the number of unemployed people is 2.4 million, and the working-age population 40 million, what is the unemployment rate?

(State your answer as a percentage to 1 decimal place.)

Answer 2

8.2%

Question 3

In the Ikean economy, the working-age population is equal to 104. In total, there are 45 people employed and 15 people unemployed.

What is the economic activity rate?

(State your answer as a percentage to 1 decimal place.)

Answer 3

60/104. x100. = 57.7%

Question 4

If the number of employed people in the UK is 29 million, the number of unemployed people is 2.0 million, and the working-age population 44 million, what is the employment rate?

(State your answer as a percentage to 1 decimal place.

Answer 4

2/26 = 7.7

WRONG!!!!

Question 5

Unemployment includes all the people in the working-age population without jobs.

True or false?

Answer 5

False

Question 6

If the current value of the CPI is 94 and it changes to 111 in one year’s time, what is the annual inflation rate?

State your answer to 2 decimal places.

Answer 6

111-94. / 94 = 18.09%

Question 7

Hyperinflation refers to

Answer 7

An inflation rate of 50% or more per month

Question 8

In the economy of Dot, the working-age population is equal to 103. In total, there are 48 people employed and 14 people unemployed.

How many people in Dot are economically active?

Answer 8

62?

Question 9

Tom is 27. He is currently without work. He says he would like a job, but there are none in his local community so he gave up searching two months ago.

Tom is currently unemployed?

Answer 9

False

Question 10

Over the past 50 years, Moneyland had an average money supply growth rate of 24% and average real GDP growth of 3%. Find Moneyland’s average inflation rate over this period.

Answer 10

21%

Question 11

To be unemployed, a person must fall into one of three categories. Choose these three from the list below:

Answer 11

Without work, but made specific efforts to find a job in the past four weeks

Waiting to start a new job within 30 days

Without work, but communicates to the interviewer that they would like a job

WRONG!!!!

Question 12

According to RPI data, the cost of 100g of instant coffee has risen from 24p in 1967 to £2.65 in 2016.

1967 is the base year. Both your answers should be stated to two decimal places (e.g. 0.137 would become 0.14).

Complete the following sentence:

The RPI price index for coffee was equal to 
100
 in 1967 and 
1066.67
 in 2016.

Answer 12

100 & 1066.67

From 100 as the base year for 1967

and then working out that 2.56/0.24 = 1066.67

WRONG!!!