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ECON 121: MACROECONOMICS PRINCIPLES

INDIVIDUAL ASSIGNMENT

Deadline: Midnight, May 29th , 2023. Submissions accepted only via Edunext.
Each question is worth 1 point, except for question 6, which is worth 2 points
You get 3 points for free for just submitting this assignment, meaning even if you got all the
wrong answers, your minimum score is 3 points.
Question 1: In the town of Gotham the adult population is 560 thousand, the number unemployed
is 25 thousand, and 150 thousand are not in the labor force. Calculate the unemployment rate.
Question 2: Provide a reason why Unemployment insurance might help affect frictional
unemployment.
Question 3: How does unemployment insurance affect rate of unemployment (increase or
decrease)? Why?
Question 4: A farmer sells sugar to a candy producer for $150. If the producer uses this sugar to
make candy that sells for $200, what is the total contribution to GDP from these transactions?
Question 5: Last quarter Newton computers produced 2,000 computers. Two thousand of these
computers were sold to households, 750 were sold to businesses, and 250 were added to
Newton’s inventory. How many of the computers should have been included in last quarter’s
GDP
Question 6:
In a simple economy, people consume only 2 goods, food and clothing. The market basket
of goods used to compute the CPI consists of 50 units of food and 10 units of clothing.

Food Clothing
2002 price per unit $2 $5
2003 price per unit $3 $15

a. What are the percentage increases in the price of food and in the price of clothing?
b. What is the percentage increase in the CPI?