Answers to revision sheet 2

Answers to revision sheet 2 - BU1003 2008 REVISION 2 1. How...

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BU1003 2008 REVISION 2 1. How do we define and measure GDP for an average country? Explain how it is calculated and in what way is it used in economics. Examine two factors that cause the measured level of GDP to underestimate productive activity in the economy. Why is economic growth important? What are the costs of economic growth.? These were covered in Revision 1. 2. A country has a labour force of 60,000 of whom 54,000 are employed. Calculate the number of unemployed people in this country. Calculate the unemployment rate in this country. One thousand of the unemployed people become discouraged and quit looking for a job. Calculate the new unemployment rate. 3. Show on diagrams, long-run macroeconomic equilibrium, and two short-run macroeconomic equilibriums. Simplified version on the sheet which I sent to you. What could cause potential GDP (or full employment GDP) to change? Page 332 in textbook. Output growth over time is caused by increases in the inputs of productive land, labour and capital and improvements in technology. Explain the business cycle and how it is generated.
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This note was uploaded on 01/17/2012 for the course BUSINESS BU2005 taught by Professor Smith during the Three '10 term at Bond College.

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Answers to revision sheet 2 - BU1003 2008 REVISION 2 1. How...

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