Question

If a country had a CPI of 91.0 last year and a CPI of 90.0 this year, then

the average quality of goods and services between last year and this year.



the average prices of goods and services increased between last year and this year.



the average prices of goods and services decreased between last year and this year.



the quantity of consumer goods and services produced decreased between last year and this year.




If the working age population is 250 million, 170 million are employed and 9 million are unemployed, the unemployment rate is



3.6%



5.0%



6.8%



7.0%

Answer 1

Answer 1: The Correct answer is C) the average prices of goods and services decreased between last year and this year.

CPI stands for consumer Price Index. Also known as the 'basket' the index is developed by national governments to monitor the prices of basic goods and services used by the population.

This has to include basic items that the majority of population uses every day e.g. milk, chicken, electricity etc.

In this case, the CPI had decreased from 91.0 to 90.0 which means the prices fell.

Answer 2: The correct answer is A) 3.6%

The formula to calculate unemployment rate is:

No. of unemployed ÷ No. of Working People x 100

In this case, it was 9 million divided by 250 million x 100

3.6% unemployment rate is actually very less for an economy and is an indicator that the economy is doing well and creating enough jobs for most people. A high unemployment rate signals a worsening economy.