Questions on Macro Economic Indicators and GDP

The unemployment rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. Unemployment is termed as a major health of the economy and every country tries to reduce unemployment rate for sustainable growth. It is referred as the number of unemployed workers divided by the total civilian labour force. Every economy tries to ensure full employment in the country but there is the existence of natural rate of unemployment though nation tries hard to obtain full employment in the country.

The unemployment rate is calculated by measuring the number of unemployed over the total labour force (anyone 15 years or older who currently has a job or is actively seeking) [x100]. While the government does not aim for 0% unemployment as this has negative consequences, it is

Question 5 If the relevant population is 268 million people and the number of people in the labor force is 148 million, the labor force participation rate is:

As of March, 2013 the U.S. National Unemployment rate was 7.6%. A total of 11.7 million people were reported as unemployed by the Bureau of Labor Statistics. This rate is improved from the height of the recent recession, where the statistic floated around 9%, but it is still not the usual 3-4% figure we are used to seeing in regular market conditions. (bls.gov, US, 2013)

This is the percentage of people in the labor force who are unemployed. It can also be described as people who are employed receiving minimum wage without good growth opportunity in a company. Unemployment can be best described as people who are seeking for jobs, but are not yet employed. An example can be someone who just graduated from college or the university, trying to find job after graduating. When unemployment rate is high, it challenges people to find better opportunities and also means that the economy is not doing so great. Low unemployment rate means that the economy in the nation s stale an people are finding

The natural rate of unemployment is defined as the unemployment rate that is consistent when the economy is operating at its potential output. This rate would occur when the economy is considered stable.

My prediction is that GDP will increase steadily in the future. According to econedlink.org, a nation’s maximum or potential GDP or its potential output is the highest level of output that can be maintained over the long term, given any constraints on the nation’s productive resources. And a limit supply of labor, natural resource, service and capital will result in the limit of potential output, which means, the limit of GDP (2015, econedlink). Besides, according to our textbook, the determinants of economic growth to which we can attribute changes in growth rates include four supply factors: changes in the quantity and quality of natural resources, changes in the quantity and quality of human resources, changes in the stock of capital goods, and improvements in technology (2015, McConnell)

| Unemployment rate=unemployed/labor force*100 150/1000*100=15% 1000-850=150 (number of people unemployed) then divided by total labor force divided by 100

Adult unemployment rate is the percentage of unemployed people that are 25 years or older. It is compared to the total of the labour force.

Unemployment refers to the numbers of people not working and can be measured by the claimant count and labour force survey. There are different types of unemployment and each of them requires different policies to overcome them.

The unemployment rate in the United States has improved dramatically over the last two years, from a high of 8.3% in July 2012, to a low of 6.6% in January 2014. In October of 2012, the civilian labor force increased from 578,000 to 155.6 million, labor force participation increased up to 63.8%, and total employment overall rose by 410,000! Since then, the unemployment rate has been falling at a stable rate due to a political push from Washington DC and new employment initiatives. The inflation rate over the last 2 years has been relatively stably, with a few major increases and decreases in 2012 and 2013. It reached a high of 2.3% in June of 2012, and reached a low of 1.0% at the end of 2013. The federal interest rate has remained at a constant .25% over the past few years.

GDP consists of Gross (before taking into consideration the depreciation in the value of the product), Domestic (within the borders of a country) and Product which simply means a good or service. So what does it all mean when all these three factors are interlinked? GDP is simply the market value of all the final goods and services produced within a country in a given time period – usually a year (Parkin et al. 2005: 438).

“In June 2012, approximately 155,163,00 people were in the labor force (those actively employed or seeking employment). With a total U.S. working-age population of approximately 243 million individuals, the labor force participation rate currently stands at 63.8 percent. Out of those 155 million individuals in the labor force, 142,415,00 are currently employed, with unemployment hovering around 8.2 percent”.

Based on the data that I have researched, I predict that for the duration of this year, the GDP will most likely increase, but not dramatically. According to Bloomberg’s business website, “The world’s largest economy is likely to skirt the worst damage from the so-called fiscal cliff, the more than $600 billion of federal spending cuts and tax increases that will automatically take effect at the start of next year unless Congress acts” (2012, Bloomberg.com). I got to this conclusion due to the fact that throughout last year, consumers and companies put a restraint on their spending. It did not hurt so much, but did not help as much when it comes to growth in the GDP.

In fact until the world economic crisis of 2008 Real GDP has been rising almost every year. There is no denying that during the Lost Decades Japan’s economic growth has stagnated (average annual GDP Growth was 2.20 percent from 1991 to 2010), unemployment rose from 2.1% in 1991 to 4.7% in 2000 and that generally the