Econ11Fall2007ProblemSet_1AnswersDueSept19

Econ11Fall2007ProblemSet_1AnswersDueSept19 - THE GEORGE...

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Unformatted text preview: THE GEORGE WASHINGTON UNIVERSITY Department of Economics A. Yezer Answers to First Problem Set in Econ 11-10 Fall 2007 1. Answer problems 2, 3, 4, and 6 at the end of Case and Fair chapter 1. 2. You should have found lots of tables of data on the BLS website note that government websites give a good picture of the US economy and you should be able to use them as primary data sources to draw conclusions about economic conditions. In the last year, employment increased from just under 145.3 million to 145.8 million. In the last year, unemployment remained constant at 4.6% (that is unemployment was 7.1 million and labor force was (145.8 + 7.1) million, so unemployment was 7.1/(152.9) = 4.6% - the labor force is the sum of unemployment and employment). This is low for the U.S. economy and about half the rate of unemployment in Europe. Overall, the U.S. economy is currently characterized as high employment low unemployment and production is high compared to the capacity to produce. Enough of the words, look at the pictures Source: Bureau of Labor Statistics, Current Employment Statistics Survey Source: Bureau of Labor Statistics, Current Population Survey Just to put the U.S. employment and unemployment numbers in some perspective, the following table gives comparable unemployment statistics for other OECD (Organization for Economics Cooperation and Development) developed countries. 1988 1990 1992 1994 1996 1998 2000 2002 2004 2005 2006 Australia 7.0 6.7 10.5 9.5 8.2 7.7 6.3 6.4 5.5 5.1 4.9 Austria .. .. .. 3.8 4.4 4.5 3.7 4.2 4.8 5.2 4.8 Belgium 8.8 6.6 7.1 9.8 9.6 9.3 6.9 7.5 8.4 8.4 8.2 Canada 7.8 8.1 11.2 10.4 9.6 8.3 6.8 7.7 7.2 6.8 6.3 Czech Republic .. .. .. 4.3 3.9 6.4 8.7 7.3 8.3 7.9 7.2 Denmark 5.7 7.2 8.6 7.7 6.3 4.9 4.4 4.6 5.5 4.8 3.9 Finland 4.1 3.2 11.7 16.8 14.7 11.3 9.7 9.1 8.9 8.4 7.7 France 9.4 8.5 9.9 11.7 11.6 11.1 9.1 8.7 9.6 9.7 9.4 Germany 1 6.2 4.8 6.4 8.3 8.6 8.8 7.2 8.2 9.5 9.4 8.4 Greece 6.9 6.3 7.8 8.8 9.7 11.0 11.2 10.3 10.5 9.9 8.9 Hungary .. .. 10.0 11.0 9.6 8.4 6.4 5.8 6.1 7.2 7.5 Ireland 16.2 13.4 15.4 14.4 11.6 7.6 4.3 4.5 4.5 4.3 4.4 Italy 9.7 8.9 8.8 10.6 11.2 11.4 10.1 8.6 8.0 7.7 6.8 Japan 2.5 2.1 2.2 2.9 3.4 4.1 4.7 5.4 4.7 4.4 4.1 Korea .. 2.4 2.5 2.5 2.0 7.0 4.4 3.3 3.7 3.7 3.5 Luxembourg 2.0 1.7 2.1 3.2 2.9 2.7 2.3 2.7 5.1 4.5 4.8 Netherlands 7.2 5.9 5.3 6.8 6.0 3.8 2.9 2.8 4.6 4.7 3.9 New Zealand 5.6 7.8 10.4 8.1 6.1 7.4 6.0 5.2 3.9 3.7 3.8 Norway 3.3 5.8 6.5 6.0 4.8 3.2 3.4 3.9 4.4 4.6 3.5 Poland .. .. .. 16.9 14.1 10.2 16.1 19.9 19.0 17.7 13.8 Portugal 5.8 4.8 4.3 6.9 7.3 5.1 4.0 5.0 6.7 7.6 7.7 Slovak Republic .. .. .. 13.7 11.3 12.6 18.8 18.7 18.2 16.2 13.4 Spain 15.8 13.0 14.7 19.5 17.8 15.0 11.1 11.1 10.6 9.2 8.5 Sweden 1.8 1.7 5.6 9.4 9.6 8.2 5.6 5.0 6.3 7.3 7.0 Switzerland .. .. 3.0 3.9 3.9 3.6 2.7 3.2 4.4 4.5 4.0 United Kingdom 8.5 6.9 9.8 9.3 7.9 6.1 5.4 5.1 4.7 4.8 5.3 United States 5.5 | 5.6 7.5 | 6.1 5.4 4.5 4.0 5.8 5.5 5.1 4.6 Euro area .. .. 8.5 10.7 10.6 10.0 8.2 8.2 8.8 8.68....
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Econ11Fall2007ProblemSet_1AnswersDueSept19 - THE GEORGE...

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