Question 1: U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell us, and what does it not tell us, about the well-being of U.S. residents?
Question 2. In a simple economy, people consume only 2 goods, food and clothing. The market basket of goods used to compute the CPI has 50 units of food and 10 units of clothing.
food clothing
2002 price $4 $10
2003 price $6 $20
a. What are the percentage increases in the price of food and in the price of clothing?
b. What is the percentage increase in the CPI?
c. Do these price changes affect all consumers to the same extent? Explain.
Question 3. The table below uses data for the year 2003 provided by the BLS and adjusted to be comparable to U.S. data. All values are in thousands. Fill in the blank entries in the table. Show your work!
|
Country
|
Adult
Population
|
Labor
Force
|
Employed
|
Unemployed
|
Unemployment
Rate
|
Labor-Force
Participation
Rate
|
|
Japan
|
109,474
|
|
62,510
|
3,500
|
|
|
|
France
|
|
26,870
|
|
2,577
|
|
57.41
|
|
Germany
|
70,159
|
39,591
|
|
|
9.69
|
|
Question 4. Make a list of things that would shift the aggregate demand curve to the right.
Question 5. Make a list of things that would shift the long-run aggregate supply curve to the right.