1) Explain why a low unemployment rate does not necessarily mean the labor market is doing well. Explain why we also want to look at the labor force participation rate.
2) Explain why real GDP is more useful in tracking economic growth than nominal GDP. Make sure you explain what GDP is trying to measure and what differentiates rGDP from nGDP.
3) Explain what is meant by “the purchasing power of money,” being sure to discuss how it relates to inflation.