mt2f05

mt2f05 - ECON 2 Midterm 2 Fall 2005 Answer key 1 In 2005...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 8
ECON 2 - Midterm 2 – Fall 2005 Answer key 1) In 2005: WAP = 10000, LFPR=80%, U=600 a) Unemployment rate? LF= 80% * 10000=8000 UR=U/LF=600/8000=7.5% b) In 2006, LF=8000+300=8300 U=600+(300*1/3)=700 E=LF-U=8300-700=7600 UR=700/8300=8.43% LFPR=8300/10000=83% EPR=7600/10000=76% c) Discouraged workers = (300*1/3)*10%=10 LF=8300-10=8290 U=700-10=690 E=7600 UR=690/8290=8.32% LFPR=8290/10000=82.9% EPR=7600/10000=76% 2) Question 2 a) Nominal GDP for 2003 and 2004 2003: NGDP= 6*900+3*200 = 5400+600=6000 2004: NGDP= 4*1200+4*600=4800+2400=7200 Nominal Growth =7200/6000-1=20% b) Real GDP (base year =2003) 2003: RGDP=6000 2004: RGDP = 1200*6+600*3=7200+1800=9000 Real Growth = 9000/6000-1=50% c) Chain Link Method for RGDP (2004) Using chain link method to calculate real GDP growth for 2004 Real growth (base year 2003) = 50% Real growth (base year 2004) = 63.6% Geometric average = sqrt(1.5*1.636) = 1.567 (real growth in 2004) Arithmetic average = (1.5+1.636)/2 = 1.568 Real GDP in 2004 = Real GDP at 2003 * chain linked growth rate = 6000* 1.567 = 9399.14 (geometric ) or
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
= 6000*1.568
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/15/2008 for the course ECON 2 taught by Professor Hou during the Fall '07 term at UCLA.

Page1 / 11

mt2f05 - ECON 2 Midterm 2 Fall 2005 Answer key 1 In 2005...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online