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assignment3

Course: ECON 201, Fall 2009
School: CSU San Marcos
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201 Eco - Monchuk Homework Assignment 3 Instructions : Complete the following questions and turn in your solutions at the end of the class lecture on the date due. Remember to include your name and student number on your submitted document. The due date for this assignment is Thursday September 9th. 1. Which of the following are macroeconomic ideas and which are microeconomics ideas? (a) The effect of unions in the airline industry (b) The impact of increasing social security benefits to workers at General Motors. (c) The impact of increasing social security benefits to Mexican workers in Mexico. (d) The effect of an interest rate hike on investment in the housing market. (e) The effect of an interest rate hike on output in the US. (f) The effect of increasing the reserve requirements for banks in the US. (g) The effect of increased sales taxes on local government spending in Hattiesburg. 2. GDP (a) What does GDP stand for? (b) What is the difference between nominal GDP and real GDP? If you wanted to compare GDP per capita for the years 1975 and 2000 which would be best the measure to use? (c) Which goods purchased will count in the determination of GDP? (d) State whether or not the following items would be counted as part of GDP and why 1. The 5 hours this past weekend of foregone labor income spent lying in front of the pool. 2. The three cans of soda you purchased while lying relaxing in front of the pool. 3. The purchase of a new house here in Hattiesburg. 4. The purchase of a used house here in Hattiesburg. 3. Inflation and output (a) What happened to inflation during the great depression? (b) If you had $100 at the start of the great depression (i.e. in 1930) could you buy more or fewer goods ...

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