Business Cycles, Employment & Inflation — Drills · Grade 12 Social Studies
Chapter: Measuring the Economy & Public PolicyWhat these drills covers
By the end of Business Cycles, Employment & Inflation you should be able to:
- I can read indicators together.
- I can explain a civic or economic mechanism using evidence, assumptions, and a qualified conclusion.
4 questions, written answer, each with a worked explanation.
Vocabulary used: labor force, unemployment rate, inflation, disinflation, real income.
Problem 1
Answer and explanation
The aggregate combines different sectors and places. Growth elsewhere or productivity changes can offset local losses. Use regional and distributional evidence instead of assigning the national direction to every household.
Problem 2
Answer and explanation
Five people leave the measured labor force instead of becoming employed. Both the unemployment count and denominator change. The rate falls to about 5.26 percent while employment remains 90, so job creation cannot be inferred from the rate alone.
Problem 3
Answer and explanation
Disinflation is a lower positive rate of price increase; deflation is an actual price-index decline. Prices can keep rising when inflation slows. Identify the index and period rather than interpreting a smaller rate as falling prices.
Problem 4
Answer and explanation
Prices can rise faster than pay. In the supplied example, dividing 1.04 by 1.05 gives a slight real decline. State the price measure and period; different household purchases or employment circumstances may produce different experiences.