MT1PSol - ECO 320L Spring 2009 Professor Beatrix Paal...

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ECO 320L Spring 2009 Professor Beatrix Paal Midterm 1 name: 2/11/2009 1. Use the following to answer questions a-b: Real GDP in the US, measured in year 2000 (chained) dollars was $8.03 trillion in 1995, and $11.05 trillion in 2005. a. (2 points) Calculate the average annual growth rate of real GDP in the U.S. during the decade 1995-2005. b. (2 points) What will real GDP be in 2015, if the growth trend of the 1995-2005 decade continues through 2005-2015? 2. Use the following to answer questions a-b: The following tables contain historical data on the US unemployment rate and labor force participation rate, and recent information about the number of people employed, unemployed and the size of the adult civilian non-institutional population. Page 1 4.9% 66.1% Apr 08 5.0% 66.0% Jul 08 5.8% 66.1% Oct 08 6.6% 66.0% Millions of people Employed 142.1 Unemployed 11.6 Population (adult civilian) 234.7 unemployment rate labor force participation rate Jan 08
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a. (4 points) Calculate the unemployment rate and the labor force participation rate in January 2009. b. (2 points) Does it seem like that unemployed workers are getting discouraged about their chances of finding a job? Explain. 3. Use the following to answer questions a-e: HINTS: Recall the definitions of private disposable income as GNP – T + TR + INT and net government income as T – TR – INT. Remember also that saving of both the private sector and the government sector is generally defined as current income minus current consumption. The home country has a GDP of $190. Some of the country’s citizens receive wages from abroad in the total amount of $10. The country employs no foreign factors of production. Its trade deficit is $20 and its government runs a budget deficit of $40. Tax collection by the government exactly covers transfer payments and the interest on the national debt. Private saving is 30% of private disposable income.
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This note was uploaded on 10/25/2010 for the course ECO 320L taught by Professor Kendrick during the Fall '10 term at University of Texas.

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MT1PSol - ECO 320L Spring 2009 Professor Beatrix Paal...

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