Assignment:
Answer the following questions
1) When we analyze the unemployment rate in more detail, which three categories of unemployment can we use for a more detailed picture of unemployment? How do these three differ?
2) Name and explain two different kinds of costs of unemployment for an individual worker.
3) Who is considered part of the labor force in the USA? How are the groups that make up the labor defined for statistical purposes?
4) Which are the three primary areas of concern in macroeconomic analyses? What do we have to take into account in attempts to quantify changes in these respective areas? (Name at least one aspect for each of the three areas.)
5) Briefly explain what a ‘recession' is.
6) Define the term GDP and explain your definition.
7) Name two different kinds of transactions in an economy that are not considered part of GDP. Why are these transactions excluded from measuring GDP?
8) Which other areas of economically relevant activity are excluded from GDP measures?
9) What is the difference between GDP and GNP?
10) Why do we distinguish gross and net investment?
11) If we want to assess changes in the real economic activity in an economy, why do we use changes in real GDP for finding an answer, instead of changes in nominal GDP?
12) Based on the following table, calculate the growth rate of real GDP and the change in the GDP deflator (both based on the BEA approach, see textbook Case Fair Oster). Explain why these calculations offer only an approximation of growth and inflation rates.
Output Yaer 1 Output Year 2 Price Year 1 Price Year 2
Good A 9 11 0.50 0.55
Good B 8 7 0.6 0.70
Good C 12 9 0.75 0.9
Good D 7 5 0.8 0.6