Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 28.1, Problem 1QQ
To determine
The measurement of unemployment rate.
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Suppose the real GDP of an economy is $500 billion dollars and its unemployment rate is 6%. If the natural rate of unemployment is estimated at 4%, what is the value of the country’s potential GDP (LAS) in billions of dollars? Value of the country’s potential GDP (LAS) is $ billion.
1
Why could the employment rate be a more useful statistic than the unemployment rate? Explain in your own words and provide an example.
Suppose there are 180 million employed people and 20 million unemployed people.
a) What is the unemployment rate?
b) Suppose that 5 million unemployed people give up their search for jobs and become
discouraged workers. What is the new official unemployment rate?
Chapter 28 Solutions
Principles of Economics (MindTap Course List)
Ch. 28.1 - Prob. 1QQCh. 28.2 - Prob. 2QQCh. 28.3 - Prob. 3QQCh. 28.4 - Prob. 4QQCh. 28.5 - Prob. 5QQCh. 28 - Prob. 1CQQCh. 28 - Using the numbers in the preceding question, what...Ch. 28 - Prob. 3CQQCh. 28 - Prob. 4CQQCh. 28 - Prob. 5CQQ
Ch. 28 - Prob. 6CQQCh. 28 - Prob. 1QRCh. 28 - Prob. 2QRCh. 28 - Prob. 3QRCh. 28 - Prob. 4QRCh. 28 - Prob. 5QRCh. 28 - Prob. 6QRCh. 28 - Prob. 7QRCh. 28 - Prob. 1PACh. 28 - Prob. 2PACh. 28 - Prob. 4PACh. 28 - Prob. 5PACh. 28 - Prob. 6PACh. 28 - Prob. 7PACh. 28 - Prob. 8PACh. 28 - Prob. 9PACh. 28 - Prob. 10PA
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- How to Measure Changes in the Cost of Living introduced a number of different price indices. Which price index would be best to use to adjust your paycheck for inflation?arrow_forwardWhat is the difference between the price level and the tale of inflation?arrow_forwardWhat happens to the labor force participation rate when employed individuals are reclassified as unemployed? What happens when they are reclassified as discouraged workers?arrow_forward
- How do economists use a basket of goods and services to measure the price level?arrow_forwardUsing the above data, what is the unemployment rate? These data are U.S. statistics from 2010. How does it compare to the February 2015 unemployment rate computed earlier?arrow_forwardWhy is the GDP deflator not an accurate measure of inflation as it impacts a household?arrow_forward
- What is indexing?arrow_forwardExplain how the natural rate of unemployment may be higher in low-income countries.arrow_forward9. Answer the following macroeconomics questions.i. What is the difference between nominal GDP and real GDP? Which one of them is used tocalculate the economic growth rate? Justify your answer.ii. Give the equation used to calculate the unemployment rate. State the different types ofunemployment. In your opinion, which type is the most problematic one? Justify your answer.iii. Governments may achieve certain economic goals; say controlling inflation or boostingeconomic growth, by implementing fiscal and/or monetary policies. Briefly explain thedifference between fiscal and monetary policiesarrow_forward
- 1) Which do you think has a greater effect on the consumer price index - a 10% increase in the price of chicken or a 10% increase in the price of gold? Why? 2) Explain the meaning of nominal interest rate and real interest rate. How are they related? 3) If the price of a Navy submarine rises, is the consumer price index or the GDP deflator affected more? Why?arrow_forward1. Consider the following data on Prices and Quantities of T-Shirts and Pajamas on the attached image. I. What wasthe growth rate ofNominalGDP between 2016and 2017?II. Was the growth rate of real GDP higher or lower that the growth rate of nominalGDP?Explain. III. Using 2015 asthe base year, calculate the CPI for each year. IV. Calculate the inflation rate for 2015, 2016 and 2017.arrow_forward
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