Assignment
1. In comparing the economies of two nations, economists frequently use per capita GDP figures.
(a) Why is per capita GDP rather than total GDP used?
(b) What other indicators are important in comparing economies?
2. In the midst of a deep recession, the president of the United States calls on the nation's consumers to "spend their way" out of the slump. What does the president mean?
3. Assume that the nation has just reached the bottom of a long recession. Summarize the probable effect of the recession upon:
(a) prices, (b) wages, (c) employment,(d ) investment, and (e) profits.