Assignment - Unemployment and Inflation: Two Persistent Problems in the Arab World
Learning Objectives -
- Define unemployment rate and labor force participation rate and understand how they are computed.
- Identify the three types of unemployment.
- Explain what factors determine the unemployment rate.
- Define price level and inflation rate and understand how they are computed.
- Use price indexes to adjust for the effects of inflation.
- Distinguish between the nominal interest rate and the real interest rate.
- Discuss the problems that inflation causes.
Problem - Calculating Real Average Hourly Earnings
|
Year
|
Nominal Average Hourly Earnings
|
CPI (1984 = 100)
|
Real average Hourly Earnings (1984 Dollars)
|
|
2005
|
$16.13
|
195.3
|
|
|
2006
|
16.76
|
201.6
|
|
|
2007
|
17.42
|
207.3
|
|
Textbook - Economics, Arab World Edition R. Glenn Hubbard, Anthony Patrick O'Brien, Ashraf Eid, Amany El Anshasy,
Chapter 8: Unemployment and Inflation.