Part -1:
1. (Measuring Unemployment) Suppose that the U.S. noninstitutional adult population is 230 million and the labor force participation rate is 67 percent.
a. What would be the size of the U.S. labor force?
b. If 85 million adults are not working, what is the unemployment rate?
2. (Types of Unemployment) Determine whether each of the following would be considered frictional, structural, seasonal, or cyclical unemployment:
a. A UPS employee who was hired for the Christmas season is laid off after Christmas.
b. A worker is laid off due to reduced aggregate demand in the economy.
c. A worker in a DVD rental store becomes unemployed as video¬on-demand cable service becomes more popular.
d. A new college graduate is looking for employment.
3. (The Meaning of Full Employment) When the economy is at full employment, is the unemployment rate at zero percent? Why or why not? How would a more generous unemployment insurance system affect the lull employment figure?.
4. (Inflation) Here are some recent data on the U.S consumer price index:
|
Year
|
CPI
|
Year
|
CPI
|
Year
|
CPI
|
|
1992
|
140.3
|
1999
|
166.6
|
2006
|
201.6
|
|
1993
|
144.5
|
2000
|
172.2
|
2007
|
207.3
|
|
1994
|
148.2
|
2001
|
177.1
|
2008
|
215.3
|
|
1995
|
152.4
|
2002
|
179.9
|
2009
|
214.5
|
|
1996
|
156.9
|
2003
|
184.0
|
2010
|
218.1
|
|
1997
|
160.5
|
2004
|
188.9
|
2011
|
224.9
|
|
1998
|
163.0
|
2005
|
195.3
|
2012
|
229.6
|
Cowie the inflation rate for each year 1993-2012 and determine which were years of inflation. In which years did deflation occur? In which years did disinflation occur? Was there hyperinflation in any year? (Sources of Inflation) Using the concepts of aggregate supply and ag-gregate demand, explain why inflation usually increases during wartime.
5. (Inflation and Interest Rates) Using a demand-supply diagram for loanable funds (like the exhibit below), show what happens to the nominal interest rate and the equilibrium quantity of loans when both borrowers and lenders increase their estimates of the expected inflation rate from 5 percent to 10 percent.
Part -2:
I. (Measuring Labor ProductivitO How do we measure labor productivitr How do changes in labor productivity affect the U.S. standard of living?
2. (Long-Term Productivity Growth) Suppose that two nations start out in 2013 with identical levels of output per work hour-say, $100 per hour. In the first nation, labor productivity grows by 1 percent per year. In the second, it grows by 2 percent per year. Use a calculator or a spreadsheet to determine how much output per hour each nation will be producing 20 years later, as¬suming that labor productivity growth rates do not change. then, determine how much each will he producing per hour 100 years later. What do your results fell you about the effects of small differences in productivity growth rates?
3. (Long Term Productivity Growth)Suppose that two nations start out in 2013 with identical levels of output per work hour-say, $100 per hour. In the first nation. labor productivity grows by 1 percent per year In the second. it grows by 2 percent per year. Use a calculator or a spreadsheet to determine how much output per hour each nation will be producing 20 years later, as-suming that labor productivity growth rates do not change. Then, determine how much each will he producing per hour 100 years later. What do your results tell you about the effects of small differences in productivity growth rates?
4. (Technological Change and Unemployment)What are some examples, other than those given in the chapter, of technologi¬cal change that has caused unemployment? And what are some examples of new technologies that have created jobs? How do you think you might measure the net impact of technological change on overall employment and GDP in the United States?