Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Economic growth
B
Labor force participation
C
Natural rate of unemployment
D
Market demand
Understanding the Answer
Let's break down why this is correct
Answer
The Consumer Price Index (CPI) measures how much prices for goods and services rise over time, which helps us understand inflation. Similarly, the unemployment rate shows the percentage of people who are looking for work but can't find any, helping us understand the health of the job market. Just as CPI indicates how much more or less expensive things have become, the unemployment rate indicates how many people are struggling to find jobs. For example, if the unemployment rate is high, it suggests that the economy might not be doing well, just as rising CPI suggests that people are paying more for everyday items. Both CPI and the unemployment rate are important tools for understanding different parts of the economy.
Detailed Explanation
The natural rate of unemployment is the level of unemployment that exists when the economy is healthy. Other options are incorrect because Some might think economic growth is the same as unemployment; Labor force participation refers to how many people are working or looking for work.
Key Concepts
Consumer Price Index (CPI)
Inflation
Unemployment
Topic
Understanding Consumer Price Index
Difficulty
easy level question
Cognitive Level
understand
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