Assignment:
1) Exactly how did the Great Recession of 2008-2009 begin in America
2) Give two reasons how the recession, which started in America, spread to Europe
3) What is the purpose of Purchasing Price Parity -
4) The book lists two reasons for the pervasively high levels of unemployment in Europe. Explain why these two reasons lead to high unemployment
5) General Motors buys $2 million from Firestone Tires company. Is this counted as part of GDP. Why or why not(2 sentences or less)
6) Discount Tires Co. buys $2 million worth of tires from Firestone Tire Company. Is this transaction included in GDP? Why or why not?
7) Toyota assemblies cars in Germany and then sells them in America. Is this a part of GDP? Why or why not?
8) Your parents sell their home where they had lived since 2002 and purchased a charming 19th century, old Victorian home Is this a part of GDP? Why or why not?
9) Assume that the Miami Heat decides not to renew the contract of both Lebron James and Dwayne Wade. Assume the players were let go 6 weeks ago. Dwayne Wade has been sending out resumes ever since. LeBron has not because he is confident he will be picked up and therefore, does not need to send out resumes. Which one is considered unemployed? Why or why not?
10) Assume that in 2014 the Chinese government will appreciate the value of its dollar (the Yuan) so that their exports will be more expensive. Which will be greater, the GDP deflator or the CPI? Why?
11) At the beginning of 2012 the unemployment rate was 8.1% All during 2012 the economy grew at 2.5% and the end of 2012 the unemployment rate was 7.8%. Assume that the labor force productivity did not grow, neither did the labor force. Did Okum's Law hold - Show work
12) Assume the same information as in questions 11but that the labor force decreased by 1% due to baby boomers retiring and that the rate of output, due to tech changes, increased by 2%. Did Okum's Law now hold - show work.
13) According to the Atlantic Monthly article (go to the library website and under journals call up the Atlantic Monthly - May , 2013 and read ‘The Slacker Trap')
a) As Japanese firms came out of the recession their employment practices changed. Instead of hiring on full-time college recruits, they instead hire them on as ‘temps'. What is wrong with that? How is it that this can hurt the Japanese economy in the long run?
b) In Japan, how can temporary job loss lead to chronic unemployment
c) What must young American workers do to survive in today's economy
d) Define human capital, according to the magazine article.