中文（繁體）
中文（简体）
English
IB Economics: Inflation and Unemployment (Paper 1: basics)
IB Economics: Inflation and Unemployment (Paper 1: basics)
IB economics inflation and unemployment paper 1, basics: inflation rates, real wages, unemployment rates and purchasing power.
Direct answers Answers in order: 5 percent, about 1.92 percent higher, 5 percent, about 4.88 percent, about 1.85 percent, a 20 percent fall, 40,000 more people, about 1.87 percent lower, 4 percent, and the denominator should be the labour force.
01 Paper details (check answers afterwards)
| Item | Detail |
|---|---|
| Questions | 10 |
| Suggested time | 20 |
| Difficulty mix | Foundation 3 · Intermediate 3 · Challenge 3 · Error redo 1 |
| Chapter | Chapter: IB Economics: Inflation and Unemployment |
| Level | IB |
02 Questions (10 items)
- FoundationThe consumer price index rises from 800 to 840. What is the inflation rate?
- FoundationNominal wages rise 6 percent while prices rise 4 percent. How much do real wages change?
- FoundationThe labour force is 5,000,000 and 250,000 are unemployed. What is the unemployment rate?
- IntermediateThe consumer price index rises from 120 to 132 over two years. What is the average annual inflation rate?
- IntermediateThe nominal interest rate is 10 percent and inflation is 8 percent. What is the real interest rate?
- IntermediateThe price index rises from 100 to 125. How does the purchasing power of the same sum change?
- ChallengeThe labour force is 4,000,000 and unemployment rises from 6 percent to 7 percent. By how many people does unemployment rise?
- ChallengeA monthly salary of 20,000 rises 5 percent while prices rise 7 percent. How does real purchasing power change?
- ChallengeThe index rises from 150 to 156. What is the inflation rate?
- Error redoA student divides the unemployed by the total population. What is wrong?
03 Answers and one-line notes
| # | Answer | One-line note |
|---|---|---|
| 1 | 5 percent | The inflation rate is the change divided by the original index, so 40 over 800 gives 0.05. |
| 2 | About 1.92 percent higher | The real change is 1.06 divided by 1.04 minus one, not 6 percent minus 4 percent. |
| 3 | 5 percent | The unemployment rate divides by the labour force, not by the total population. |
| 4 | About 4.88 percent | The 10 percent is cumulative over two years, so the annual rate needs a square root. |
| 5 | About 1.85 percent | The real rate is 1.10 divided by 1.08 minus one, while simple subtraction overstates it. |
| 6 | It falls by 20 percent | Purchasing power is 100 over 125, which is 0.8, so one fifth of the basket is lost. |
| 7 | It rises by 40,000 people | Unemployment goes from 240,000 to 280,000, a rise of 40,000 people. |
| 8 | It falls by about 1.87 percent | 21,000 deflated by 1.07 gives about 19,626, which is 1.87 percent below the original. |
| 9 | 4 percent | Six divided by 150 gives 0.04, since six index points is not six percent. |
| 10 | The denominator should be the labour force, since the population includes children and retirees | Using the total population understates unemployment because people outside the labour force are excluded. |
04 What to do after marking
- After marking, redo only the wrong items and write down which step went wrong (formula, unit, or misread number).
- Repeat the same item two days later; move to the next paper only when both attempts are correct.
- Parents only need the answer and note columns; there is no need to explain every item.
Work out inflation from the change in the consumer price index, convert every real value by division, and remember that the unemployment rate divides by the labour force, not the whole population.Tutor Registration →
Questions and answers are written originally by the TutorZone team and are not taken from any school, publisher or examination authority paper. Every value is checked by computer.