Problem Set #4ECON 101 Fall 2016You may work on the problem set in groups. Students from the same recitation maysubmit one assignment. All submitted assignments must be written clearly andstapled with the problems included consecutively (we will not fish for youranswers).The names and PIDs of all students must be written at the top as well asthe Recitation Section and TA name. The assignment should be titled ECON101-Staub-Problem Set #4. The problem set must be turned in separately from the EssayQuestion.For example, the top of your assignment should look like:John Doe (PID)Jane Smith (PID)Recitation ECON101.701 (TA name)Econ101-Staub-Problem Set #41.In one sentence or less, what happens to GDP and its components (use the expendituremethod) in the following situation: Bill gets his pension check from the federal governmentand buys a watch made in China for $100?2.______ (True/False/Uncertain) “Full employment” occurs when every working agedindividual in the economy is employed.3.