Answer1[1] - ECO 301 Intermediate Macroeconomics, Spring...

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1 ECO 301 Intermediate Macroeconomics, Spring 2010 Instructor: Yangyi Shan Answer Key for Homework Assignment 1 1. Working with the data (24 points) For data to use in this exercise, go to the Federal Reserve Bank of St. Louis FRED database at a) Download real gross domestic product data (GDPC1), and civilian employment data (CE16OV). Define average labor productivity for any year as real gross domestic product in the last quarter of the year divided by civilian employment in the last month of the year. Calculate the total percentage growth in average labor productivity in the U.S. economy for the 1950s, 1960s, 1970s, 1980s, and 1990s. In which decades did average labor productivity grow the most quickly overall? The most slowly? (20 points) Hint: For 1950s: Real GDP (Billions 2005 dollars) Employment (Thousands) Average labor productivity Total percentage growth in average labor productivity 1950 2086.2 59429 35104.07 1959 2785.2 65341 42625.61 21.43% 1960 2802.6 65778 42606.95 1969 4263.3 78740 54144.02 27.08% 1970 4256.6 78594 54159.35 1979 5889.5 99933 58934.49 8.82% 1980 5883.5 99634 59051.13 1989 7944.7 117830 67425.10 14.18% 1990 7988.9 118241 67564.55 1999 11014.3 134523 81876.71 21.18% b) Express the growth rates for each decade in annualized terms by using formula: (1+g) 10 = 1+G where g is the annual growth rate and G is the growth rate for the decade you figured out in part a. For each of the five decades, use your calculated values for G and the formula above the solve for g. (4 points) Hint: For 1950s, the annual growth rate g = (1+21.43%) (1/10) -1=1.96% G (the growth rate for the decade) g(the annual growth rate) 1950s 21.43% 1.96% 1960s 27.08% 2.43% 1970s 8.82% 0.85% 1980s 14.18% 1.33% 1990s 21.18% 1.94%
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2 2. GDP (10 points) After a boat rescues everyone else form Gilligan’s island, the Professor and Gilligan remain behind, afraid of getting shipwrecked again with the same bunch of people. The Professor grows coconuts and catches fish. Last year he harvested 1000 coconuts and caught 500 fish. He values one fish as worth two coconuts. The Professor gave 200 coconuts to Gilligan in exchange for help in the harvest, and he gave Gilligan 100 fish in exchange for collecting worms for use in fishing. The Professor stored 100 of his coconuts in his hut for consumption at some future time. He also used 100 fish as fertilizer for the
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This note was uploaded on 11/12/2011 for the course ECON 300 taught by Professor Zh during the Spring '11 term at SUNY Albany.

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Answer1[1] - ECO 301 Intermediate Macroeconomics, Spring...

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