1. Suppose you are given the following data for a small economy: Number of unemployed workers: 1,000,000. Labor force: 10,000,000. Based on this data, answer following: a. What is the unemployment rate? b. Can you determine whether the economy is operating at its full employment level? c. Now suppose people who had been seeking jobs become discouraged, and give up their job searches. The labor force shrinks to 900,500 workers, and unemployment falls to 500,000 workers. What is the unemployment rate now? Has the economy improved?

2 Nominal GDP for an economy is $10 trillion. Real GDP is $9 trillion. What is the value of the implicit price deflator?