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Macroeconomics
Examine the price-change numbers shown in the example on page 403.
a. Use the formula to calculate the increase in the CPI from March 2007 to March 2008 to two decimal places. Verify that the number shown in the table is correct to a single decimal place.
b. The level of the CPI in March 2007 was 205.10.
Calculate the CPI for March 2008.
a. Use the formula to calculate the increase in the CPI from March 2007 to March 2008 to two decimal places. Verify that the number shown in the table is correct to a single decimal place.
b. The level of the CPI in March 2007 was 205.10.
Calculate the CPI for March 2008.
Macroeconomics
In recent decades, women have worked more hours in paid jobs and fewer hours in unpaid housework.
a. How would this increase in work hours affect GDP?
b. Explain why this increase in measured GDP will overstate the true increase in output. Also explain how a set of augmented national accounts which includes home production would treat this change from nonmarket work to market work.
c. Explain the paradox, “When a person marries his or her gardener, GDP goes down.”
a. How would this increase in work hours affect GDP?
b. Explain why this increase in measured GDP will overstate the true increase in output. Also explain how a set of augmented national accounts which includes home production would treat this change from nonmarket work to market work.
c. Explain the paradox, “When a person marries his or her gardener, GDP goes down.”
Macroeconomics
State “A” has a targeted government expenditure of US$4 Billion from an estimated GDP of US$ 40 Billion while State “B” has a targeted government expenditure of US$5 Billion from an estimated GDP of US$ 100 Billion. Which state would you specify as expansive and which state would you classify as restrictive? Explain why you classify them so and show all your workings.
Macroeconomics
What will be the impact of increasing government investment when the economy is growing rapidly?
Hint: talk about crowding out effect.
Hint: talk about crowding out effect.
Macroeconomics
What is balanced budget multiplier? What will happen to AD(AE) curve if government spending and taxes increase by the same quantum?
Macroeconomics
In recent decades, women have worked more hours in paid jobs and fewer hours in unpaid housework.
a. How would this increase in work hours affect GDP?
b. Explain why this increase in measured GDP will overstate the true increase in output. Also explain how a set of augmented national accounts which includes home production would treat this change from nonmarket work to market work.
a. How would this increase in work hours affect GDP?
b. Explain why this increase in measured GDP will overstate the true increase in output. Also explain how a set of augmented national accounts which includes home production would treat this change from nonmarket work to market work.
Macroeconomics
Review the discussion of bias in the CPI. Explain why failure to consider the quality improvement of a new good leads to an upward bias in the trend of the CPI. Pick a good you are familiar with. Explain how its quality has changed and why it might be difficult for a price index to capture the increase in quality.
Macroeconomics
Why do national income accountants include only final goods in measuring total output GDP in a particular year? Why don’t they include the value of stocks and bonds bought and sold? Why don’t they include the value of used furniture bought and sold?
Macroeconomics
Use the following data to calculate (a) the size of the labour force and (b) the official unemployment rate: total population, 500; population under 15 years of age or institutionalized, 120; not in labour force, 150; unemployed, 23; part-time workers looking for full-time jobs, 10.
Macroeconomics
What are the four major phases of the business cycle? How long do business cycles last? How do seasonal variations and secular trends complicate measurement of the business cycle? Why does the business cycle affect output and employment in durable goods industries more severely than in industries producing non-durables?
