Question

1. Macroeconomic information for the economy of Nauru is given below:

                                                                           2000         2001

                        Output (pizzas)                          7200         9200

                        Employment (workers)                720           820

                        Unemployed (workers)                  75           100

                        Price per pizza                          $8.20        $9.00

1. What was the growth rate (in %) of average labour productivity in Nauru between 2000 and 2001?

2. What was the inflation rate (in %) in Nauru between 2000 and 2001?

3. What was the unemployment rate (in %) in 2001?

Answer 1

a) In 2000,

In 2001,

So, growth rate will be

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b)

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c) The unemployment rate is defined as the percentage of unemployed workers in the total labor force. And, labor force includes both unemployed and employed workers.

So, in 2001