Assignment:
How is the Economy Doing?
Required Reading:
Bouman, John. () Principles of Macroeconomics. "Unit 3: Gross Domestic Product" Retrieved from:
https://www.inflateyourmind.com/pdfs/macroeconomics.pdf
Groshen, Erica and Simon Potter. (2003) "Has Structural Change Contributed to a Jobless Recovery?" Current Issues in Economics and Finance. NY Federal Reserve. New York. 9(8). Retrieved from:
https://www.newyorkfed.org/research/current_issues/ci9-8/ci9-8.html
Note: Please address each question separately.
Question 1. What is the difference between a final good and an intermediate good? Give one example of each. How are they treated in GDP calculations?
Question 2. True/False Statements. Indicate if the statement below is True or False. You must support your answer with a few sentences for each statement.
a. Government expenditure is the largest single category of GDP.
b. Nominal GDP uses current market prices and real GDP measures GDP using base-year prices.
c. GDP increases if you purchase General Motors stock.
Question 3. Define the natural rate of unemployment. Identify three factors that may cause the natural rate to change over time.
Question 4. Read the article and address the question below:
https://www.newyorkfed.org/research/current_issues/ci9-8/ci9-8.html
Why do you think structural unemployment delays economic recovery more than does cyclical unemployment?