PROBLEMS
1.
How much more output will the average American have next year if the $12 trillion U.S.
economy grows by:
a.
2 percent?
b.
5 percent?
c.
1.0 percent?
(Assume a population of 295 million):
a)
$814
b)
$2033
c)
 $407
To calculate the change in GDP per capita, multiply the GDP by the percent
change and divide by the population.
2.
Suppose the following data describe a nation’s population
Year 1
Year 2
Population
200 million
203 million
Labor Force
120 million
125 million
Unemployed
7.2 million
7.5 million
a.
What is the unemployment rate in each year?
b.
How has the number of unemployed changed from Year 1 to Year 2?
c.
How is the apparent discrepancy between (a) and (b) explained?
a.
The unemployment rate is calculated as the number of unemployed
divided by the labor force.
Using this formula, the unemployment rate in
year 1 is 7.2 million/120 million = 0.06 or 6 percent.
The unemployment
rate in year 2 is 7.5/125 million = 0.06 percent or 6 percent.
b.
The number of unemployed increases by .3 million or 300,000 workers.
c.
The unemployment rate is determined by both the number of unemployed
and the size of the labor force.
Even though the number of people who
were counted as unemployed increased by 300,000, the size of the labor
force also increased by the same proportion, resulting in no change in
the unemployment rate.
CHAPTER 10
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 Spring '08
 Bertaux
 Macroeconomics, Inflation, real wages

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