Episode 7 discusses two important variables in the economy, namely, unemployment and inflation. Students will learn to categorise the citizens of a country into specific groups such as population of working age group, labour force, unemployed, employed, discouraged workers and part-time workers. The methods of calculating the rate of unemployment and the rate of participation in the labour force are also explained. Students will learn about three types of unemployment that exist in the economy, reasons for unemployment and the effects of unemployment on the economy, individual and society. Lastly, the trade-off between the unemployment rate and inflation rate is highlighted; the Phillips curve is also discussed.