Question
1. Labor Market Statistics
Type of statistic
Number (millions)
Population under the age of 16
Population over the age of 16
Retirees
Discouraged workers
Frictionally unemployed
Structurally unemployed
Cyclically unemployed
a. How many people are in the country’s labor
force?
b. What is the labor force participation rate?
c. What is the unemployment rate?
d. What is the natural unemployment rate?
e. What is the rate of cyclical unemployment?

2. Interest Rates and Inflation

Year
2006
2007
2008
2009

Expected

Actual
2%
1%
2%
7%

This table shows inflation and interest rate data
on loan contracts in different years.
a. Fill in the ?Real interest rates? column.
b. In which year(s) were the actual real interest
rates on loan contracts negative?
c. In which year(s) did lenders gain at the
expense of borrowers?
d. In which year(s) did borrowers gain at the
expense of lenders?