Economics Homework

1. (Measuring Unemployment) Determine the impact on each of the following if 2 million formerly unemployed workers decide to return to school full time and stop looking for work:

a.    The labor force participation rate b.    The size of the labor force c.    The unemployment rate 

2. (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 8.5 million adults are not working, what is the unemployment rate? 3. (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 who 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.4. (Inflation) Here are some recent data on the U.S. consumer price index:             Year   CPI                                 1999   166.6                         2000   172.2                         2001   177.1                         2002   179.9Compute the inflation rate for each year 1999-2002 and determine which years were years    of inflation.  In which years did deflation occur?  In which years did disinflation occur?  Was there hyperinflation in any year?5. (Sources of Inflation) Using the concepts of aggregate supply and aggregate demand, explain why inflation usually accelerates during wartime.6. In recent years, how has the U.S. inflation rate compared with rates in other industrial economies? Why should we be careful in comparing inflation rates across countries? The Federal Reserve Bank of St. Louis maintains a Web page devoted to international economic trends. Please go tohttp://research.stlouisfed.org/publications/IETsupplement/iet2inf.pdf (Links to an external site.)Links to an external site. choose two countries and compare the countries’ recent inflation experiences. 7. (Unemployment in Various Groups) Does the overall unemployment rate provide an accurate picture of the impact of unemployment on all U.S. population groups?

8. Suppose you live in a country where the rate of inflation is very high. What can you do to protect your wealth against inflation? Briefly discuss.

Chapter 8 questions:

9. (Shifts in the PPF) Do you think the September 11, 2001 attacks on the World Trade Center and the Pentagon affected short and/or long-term productivity in the United States? (Answers may vary) 

10. (Technological Change and Unemployment) What are some examples, other than those given in the chapter, of technological 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?

11. (Productivity) As discussed in the text, per capita GDP in many developing countries depends on the fertility of land there. However, many richer economies have little land or land of poor quality.  How can a country with little land, or unproductive land, become rich?

12. (Labor Productivity) What two kinds of changes in the capital stock can improve labor productivity? How can each type be illustrated with a per-worker production function? What determines the slope of the per-worker production function?

13. (Output per Capita) Explain how output per capita can grow faster than labor productivity.  Is it possible for labor productivity to grow faster than output per capita?

14. (Rules of the Game) How do “rules of the game” affect productivity and growth?  What types of “rules” should a government set to encourage growth?

15. Please go to the Bureau of Labor Statistics (BLS) page on Quarterly Labor Productivity at http://www.bls.gov/news.release/prod2.nr0.htm (Links to an external site.)Links to an external site. to get the latest news release on productivity and costs. Rank the various sectors of the U.S. economy from highest to lowest according to their most recent productivity growth rates. Briefly comment on what you found.

16. The BLS compiles international data on manufacturing productivity at http://stats.bls.gov/news.release/prod4.nr0.htm (Links to an external site.)Links to an external site. Please find which nations have enjoyed the mostrapid growth in manufacturing productivity, for the most recent period. Which nations have experienced the slowest growth? Has productivity actually declined anywhere? (Answers may vary)

17. Why is growth important? Briefly discuss.