1. Briefly explain what an unemployment rate is and what part of a country's population is used to calculate it. How can the unemployment rate be used as an indicator of economic health? (4 points)

2. Briefly explain consumer price index (CPI) and the concept of "baskets" of goods and services. Give an example of how changes in CPI might affect economic stability. (4 points)

3. Describe each of the three categories that money is generally placed in. Include an example of each. (4 points

4. First, briefly explain the difference between direct and indirect taxation, and give an example of each. Then, define the three types of taxation that determine the rate people pay: proportional, progressive, and regressive. (4 points)

5. Describe the four major tools central banks use to enact monetary policy: reserve requirements, discount rates, open market operations, and interest on reserves. (4 points)

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1 Unemployment Rate The unemployment rate is a measure that indicates the percentage of the labor force that is actively seeking employment but currently without a job It is calculated by dividing the ... View the full answer