1. What is unemployment, and what is the unemployment rate? How is the labor force participation rate calculated? What are the costs of unemployment?
2. How are inflation and the purchasing power of money related?
3. Explain the concept of the circular flow.
4. Explain what GDP is (be sure to include a description of the components) and how it is measured, and utilize the different approaches. Why are countries interested in measuring their GDP?
5. Consider the following scenario and determine whether it would be included in GDP, the category that it would affect, and the net change in GDP: You are a manufacturer, and you produce 1,000 units of a good and store it in your warehouse as inventory.