Course: Principles of Macroeconomics (ECON 2) · Silver Oak University (fictional sample) · Prof. Ashford
Focus: Measuring Inflation & Unemployment · Objective 3 · SLO A & B

📋 Module Overview Page — "Start Here" (Canvas: Page, published)

Week 3 — Measuring Inflation & Unemployment: The CPI, the Inflation Rate & the Job Market

Last week you learned to size up an entire economy with GDP. This week you'll build the two numbers that show up in every news broadcast about the economy: the Consumer Price Index (CPI) — which tells us whether prices are rising and by how much — and the unemployment rate — which tells us how the job market is doing. Along the way you'll pick up the labor-force participation rate (LFPR), the three types of unemployment, and one more real-vs-nominal habit: the real wage.

The big question: How do economists measure "how expensive things are getting" and "how many people who want jobs have them" — and what do these numbers leave out?

By the end of this week, you can:

• compute the CPI from a fixed basket of goods and read the inflation rate from CPI values (and explain why these are two different numbers — a CPI level is not an inflation rate);
• compute the unemployment rate and the labor-force participation rate (LFPR) from raw labor-market counts, and correctly identify who counts as "unemployed" (must be actively searching);
• classify unemployment as frictional, structural, or cyclical, and explain why discouraged workers are not counted in the labor force;
• compute a real wage change from a nominal raise and an inflation rate — the real-vs-nominal habit, now applied to your own paycheck.

Do this, in order:

1. Read & watch — the Week 3 resources (≈35 min). → Readings & Resources page
2. Lecture Tutorial — work through the CPI, inflation, the unemployment rate, LFPR, and real wages with your AI tutor (≈45 min). Due Sun, Sep 20. → submit the chat share link + summary
3. Practice Exercises — 6 quick reps, ungraded (≈15 min).
4. Quiz 3 — 10 questions, closed to AI (≈20 min). Due Sun, Sep 20.
5. Discussion 3 — "Which number should lead the news — inflation or unemployment?" Initial post Fri, Sep 18, replies Sun, Sep 20.
6. Assignment 3 — the CPI, unemployment-rate & real-wage problem set (100 pts). Due Sun, Sep 20.
7. Workshop 3 — Graph & Model Workshop — "The CPI & the Unemployment Rate from Raw Data" (50 pts). Due Sun, Sep 20.

A note before you start: these two numbers — inflation and unemployment — drive more policy debate than almost anything else in this course. This week is about the measurement side: getting the arithmetic right and knowing exactly who and what each number counts (and doesn't). The policy fights over what to do about them start later. You've got this. 💪

📣 Welcome Announcement (Canvas: Announcement; available_from_offset_days = 0 — posts Mon, Sep 14)

Subject: Two numbers that run the news — CPI and the unemployment rate 👋

Hi everyone,

Quick gut-check: when was the last time you heard a news anchor say the words "inflation" or "unemployment rate"? Probably this week. Both numbers get repeated constantly — and both get misquoted constantly, usually by mixing up a level with a rate, or by assuming "not employed" automatically means "unemployed" (it doesn't).

This week, don't miss:

• The CPI is a level; inflation is a rate of change in that level. A CPI of 108 doesn't mean "8% inflation is happening right now" — it means prices are 8% higher than the base year. Keep these two ideas in separate boxes.
• Who counts as "unemployed"? Not everyone without a job. You have to be actively searching. Someone who's given up looking — a discouraged worker — isn't counted as unemployed or in the labor force at all. That single fact changes how you read the unemployment rate.
• Real vs. nominal, again — this time applied to your own paycheck. A 4% raise sounds great until you learn inflation ran 5%; your real buying power actually fell. We'll compute it exactly.

Start with the Module Overview ("Start Here"), then the readings, then your AI Lecture Tutorial. Bring a question to class — especially if the CPI-vs-inflation-rate distinction feels slippery; it trips up almost everyone the first time.

See you in class,
Prof. Ashford