Mitchell, J. (2016, Jun 10). U.S. budget deficit expands in may, hits 2.6% of GDP over past year; A
decline in corporate profits has strained government revenues while spending rises. Wall Street Journal
(Online) Retrieved from http:/ezproxy.liberty.edu:2
PROBLEM SET 5
1) What are the three functions of money? Which function is the defining characteristic?
a. a medium of exchange, a unit of account, and a store of value
b. The defining function is as a medium of exchange
2) How is the discount rat
Katz, R. (2016, Mar 29). If trump launched a trade war on asia; U.S. stocks swooned
during china's mild summer slowdown. imagine what 45% tariffs would do. Wall Street
Journal (Online) Retrieved from http:/ezproxy.liberty.edu:2048/login?
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If Trump Launched a Trade War on Asia
Katz, Richard. Wall Street Journal, Europe [Brussels] 31 Mar 2016: A.11.
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Zumbrun, J. (2016, Apr 07). Economists trim estimates for growth, jobs after early-2016 turmoil;
average forecast for GDP drops to 2.1% from 2.4% in prior survey. Wall Street Journal
(Online) Retrieved from http:/ezproxy.liberty.edu:2048/login?
ECON 214 Dowling
PROBLEM SET 4
1) Explain the difference between a budget deficit and the national debt.
Budget deficit is a particular years shortfall in revenue; National debt is the total of all
accumulated and unpaid deficits over multiple years.
ECON 214 - Dowling
PROBLEM SET 2
1) A country with a civilian population of 90,000 (all over age 16) has 70,000 employed and
10,000 unemployed persons. Of the unemployed, 5,000 are frictionally unemployed and
another 3,000 are structurally unemployed. On
PROBLEM SET 3
1) What is human capital, and how is it different from strictly the quantity of workers
available for work? Name three ways to increase a nations human capital. Is an increase
in the size of the labor force also an increase in the h
ECON 214 Dowling Problem Set 1
PROBLEM SET 1
1) If Max receives an unemployment check, would you include that transfer payment from the
government in this years GDP? Why or why not?
No because it is just a transfer of funds from one organization/person to
PROBLEM SET 5 ANSWERS
1) The three functions of money are that money serves as a medium of exchange, a unit of
account, and a store of value. The main defining characteristic is that money serves as a medium
of exchange in an economy.
2) The disc