Question 1: Consider the data in Table 7.3 below. What is the natural rate of unemployment in each of these years? Explain your answer. Table 13: Labor Market Statistics Separatio Finding Labor force 11 rate rate mil 2001 0.3% 4.4% 143.8 2005 0.3% 4.4% 142.3 2010 0.2% 3.5% 153.9 2015 0.3% 4.0% 15?.1 Question 2: umsmpmmsm RATE {p sncsm'} mu 0.0 0.0 4.0 2.0 0.0 . . - - . - . . r r . - . 1975l97319311984\"38719901993|995I9992002200520032008 2014 YEAR (Source: US. Bureau. of Labor Statistics) Consider Figure 7.7 above. which shows the unemployment rate 'om 19 75201 5. (a) YVhat does the dashed line represent? How can it be represented? (b) Based solely on this data, was the period from approximately 19962002 an expansion or recession? Explain. \"That about the period 20072013? 20132015? Question 3: Write down the quantity equation in growth terms and identify each variable. (a) According to the quantity theory of money, what determines the long-run rate of inflation? (b) If real output growth is 3 percent and velocity is constant, what must the growth rate of money be to ensure that inflation is 5 percent? Question 4: Below is the three-year bond real interest rate from 2000-2015. Explain why the real interest rate is positive for most of the 2000s and what explains it being negative in 2008-2009 and 2010-2015 What explains the near-zero real interest rate in 2015? Assuming this interest rate was used to make loans, who benefits from interest rates post-2010? Figure 8.2: Three-Year Bond Real Interest Rate: 2000-2015 5.0 4.0 3.0 2.0 MT REAL INTEREST 1.0 IRATE (PERCENT) 0.0 -1.0 -2.0 -3.0 -4.0 5.0 2000 2002 2004 2006 2008 2010 2012 2014 YEAR (Source: Federal Reserve Economic Data, St. Louis Federal Reserve)