1. Suppose you live in a community of 100 people where everyone is able and seeks to work. If 80 people are over 16 years old and 72 of them are employed, what is the unemployment rate in this community?

2. What are the three major types of unemployment? What are their causes?

3. Should the government increase the minimum wage? What should be the guidelines for an increase? What are some of the disadvantages of an increase?

4. Discuss the costs associated with high inflation.

5.  (a) What is the business cycle?

(b) Explain what is happening during

each phase of the cycle with:

I. output

II. employment

II. and inflation