Principles Of Economics 2nd Edition Steven A. Greenlaw: University Of Mary Washington, David Shapiro: Pennsylvania State University - Solutions

What are some of the problems with using the unemployment rate as an accurate measure of overall joblessness?
What happens to the labor force participation rate when employed individuals are reclassified as unemployed? What happens when they are reclassified as discouraged workers?
What happens to the unemployment rate when unemployed workers are reclassified as discouraged workers?
If you are out of school but working part time, are you considered employed or unemployed in U.S. labor statistics? If you are a full time student and working 12 hours a week at the college cafeteria are you considered employed or not in the labor force? If you are a senior citizen who is
Are all adults who do not hold jobs counted as unemployed?
How is the unemployment rate calculated? How is the labor force participation rate calculated?
What is the difference between being unemployed and being out of the labor force?
Many college students graduate from college before they have found a job. When graduates begin to look for a job, they are counted as what category of unemployed?
Is the increase in labor force participation rates among women better thought of as causing an increase in cyclical unemployment or an increase in the natural rate of unemployment? Why?
Beginning in the 1970s and continuing for three decades, women entered the U.S. labor force in a big way. If we assume that wages are sticky in a downward direction, but that around 1970 the demand for labor equaled the supply of labor at the current wage rate, what do you imagine happened to the
Whose unemployment rates are commonly higher in the U.S. economy:a. Whites or nonwhites?b. The young or the middle-aged?c. College graduates or high school graduates?
Over the long term, has the U.S. unemployment rate generally trended up, trended down, or remained at basically the same level?
Using the above data, what is the unemployment rate? These data are U.S. statistics from 2010. How does it compare to the February 2015 unemployment rate computed earlier?
Suppose the adult population over the age of 16 is 237.8 million and the labor force is 153.9 million (of whom 139.1 million are employed). How many people are “not in the labor force?” What are the proportions of employed, unemployed and not in the labor force in the population? Hint:
Say that the average worker in the U.S. economy is eight times as productive as an average worker in Mexico. If the productivity of U.S. workers grows at 2%for 25 years and the productivity of Mexico’s workers grows at 6% for 25 years, which country will have higher worker productivity at that
Say that the average worker in Canada has a productivity level of $30 per hour while the average worker in the United Kingdom has a productivity level of $25 per hour (both measured in U.S. dollars). Over the next five years, say that worker productivity in Canada grows at 1% per year while worker
An economy starts off with a GDP per capita of 12,000 euros. How large will the GDP per capita be if it grows at an annual rate of 3% for 10 years? 3% for 30 years? 6% for 30 years?
An economy starts off with a GDP per capita of$5,000. How large will the GDP per capita be if it grows at an annual rate of 2% for 20 years? 2% for 40 years?4% for 40 years? 6% for 40 years?
As technological change makes us more sedentary and food costs increase, obesity is likely. What factors do you think may limit obesity?
What sorts of policies can governments implement to encourage convergence?
How is the concept of technology, as defined with the aggregate production function, different from our everyday use of the word?
Why is investing in girls’ education beneficial for growth?
Describe some of the political and social tradeoffs that might occur when a less developed country adopts a strategy to promote labor force participation and economic growth via investment in girls’ education.
Education seems to be important for human capital deepening. As people become better educated and more knowledgeable, are there limits to how much additional benefit more education can provide? Why or why not?
Refer back to the Work It Out about Comparing the Economies of Two Countries and examine the data for the two countries you chose. How are they similar?How are they different?
Change in labor productivity is one of the most watched international statistics of growth. Visit the St.Louis Federal Reserve website and find the data section(http://research.stlouisfed.org). Find international comparisons of labor productivity, listed under the FRED Economic database (Growth
Labor Productivity and Economic Growth outlined the logic of how increased productivity is associated with increased wages. Detail a situation where this is not the case and explain why it is not.
Over the past 50 years, many countries have experienced an annual growth rate in real GDP per capita greater than that of the United States. Some examples are China, Japan, South Korea, and Taiwan.Does that mean the United States is regressing relative to other countries? Does that mean these
List some arguments for and against the likelihood of convergence.
For a high-income economy like the United States, what elements of the aggregate production function are most important in bringing about growth in GDP per capita? What about a middle-income country such as Brazil? A low-income country such as Niger?
What do economists mean when they refer to improvements in technology?
What is capital deepening?
What is an aggregate production function?
How do gains in labor productivity lead to gains in GDP per capita?
How is GDP per capita calculated differently from labor productivity?
How much should a nation be concerned if its rate of economic growth is just 2% slower than other nations?
How did the Industrial Revolution increase the rate of economic growth and income levels in the United States?
Why does productivity growth in high-income economies not slow down as it runs into diminishing returns from additional investments in physical capital and human capital? Does this show one area where the theory of diminishing returns fails to apply? Why or why not?
Would you expect capital deepening to result in diminished returns? Why or why not? Would you expect improvements in technology to result in diminished returns? Why or why not?
What are the “advantages of backwardness” for economic growth?
Would the following events usually lead to capital deepening? Why or why not?a. A weak economy in which businesses become reluctant to make long-term investments in physical capital.b. A rise in international trade.c. A trend in which many more adults participate in continuing education courses
Use an example to explain why, after periods of rapid growth, a low-income country that has not caught up to a high-income country may feel poor.
List the areas where government policy can help economic growth.
What policies can the government of a free-market economy implement to stimulate economic growth?
What do the growth accounting studies conclude are the determinants of growth? Which is more important, the determinants or how they are combined?
Assume there are two countries: South Korea and the United States. South Korea grows at 4% and the United States grows at 1%. For the sake of simplicity, assume they both start from the same fictional income level, $10,000.What will the incomes of the United States and South Korea be in 20 years?
Are there other ways in which we can measure productivity besides the amount produced per hour of work?
Explain the difference between property rights and contractual rights. Why do they matter to economic growth?
Explain what the Industrial Revolution was and where it began.
The Czech Republic has a GDP of 1,800 billion koruny. The exchange rate is 20 koruny/U.S. dollar. The Czech population is 20 million. What is the GDP per capita of the Czech Republic expressed in U.S. dollars?
In 1980, Denmark had a GDP of $70 billion(measured in U.S. dollars) and a population of 5.1 million. In 2000, Denmark had a GDP of $160 billion(measured in U.S. dollars) and a population of 5.3 million. By what percentage did Denmark’s GDP per capita rise between 1980 and 2000?
Ethiopia has a GDP of $8 billion (measured in U.S.dollars) and a population of 55 million. Costa Rica has a GDP of $9 billion (measured in U.S. dollars) and a population of 4 million. Calculate the per capita GDP for each country and identify which one is higher.
A mortgage loan is a loan that a person makes to purchase a house. Table 19.11 provides a list of the mortgage interest rate being charged for several different years and the rate of inflation for each of those years.In which years would it have been better to be a person borrowing money from a
The “prime” interest rate is the rate that banks charge their best customers. Based on the nominal interest rates and inflation rates given in Table 19.10, in which of the years given would it have been best to be a lender? Based on the nominal interest rates and inflation rates given in Table
Last year, a small nation with abundant forests cut down $200 worth of trees. $100 worth of trees were then turned into $150 worth of lumber. $100 worth of that lumber was used to produce $250 worth of bookshelves.Assuming the country produces no other outputs, and there are no other inputs used in
How might a “green” GDP be measured?
Why might per capita GDP be only an imperfect measure of a country’s standard of living?
Cross country comparisons of GDP per capita typically use purchasing power parity equivalent exchange rates, which are a measure of the long run equilibrium value of an exchange rate. In fact, we used PPP equivalent exchange rates in this module. Why could using market exchange rates, which
Why do you think that GDP does not grow at a steady rate, but rather speeds up and slows down?
Why do you suppose that U.S. GDP is so much higher today than 50 or 100 years ago?
Should people typically pay more attention to their real income or their nominal income? If you choose the latter, why would that make sense in today’s world?Would your answer be the same for the 1970s?
What does GDP not tell us about the economy?
U.S. macroeconomic data are thought to be among the best in the world. Given what you learned in the Clear It Up "How do statisticians measure GDP?", does this surprise you? Or does this simply reflect the complexity of a modern economy?
List some of the reasons why GDP should not be considered an effective measure of the standard of living in a country.
What are the two main difficulties that arise in comparing the GDP of different countries?
What are the typical patterns of GDP for a highincome economy like the United States in the long run and the short run?
How do you convert a series of nominal economic data over time to real terms?
What is the difference between a series of economic data over time measured in nominal terms versus the same data series over time measured in real terms?
Why must double counting be avoided when measuring GDP?
Would you usually expect GDP as measured by what is demanded to be greater than GDP measured by what is supplied, or the reverse?
What are the main components of measuring GDP with what is produced?
What are the main components of measuring GDP with what is demanded?
Explain briefly whether each of the following would cause GDP to overstate or understate the degree of change in the broad standard of living.a. The environment becomes dirtierb. The crime rate declinesc. A greater variety of goods become available to consumersd. Infant mortality declines
The Central African Republic has a GDP of 1,107,689 million CFA francs and a population of 4.862 million. The exchange rate is 284.681CFA francs per dollar. Calculate the GDP per capita of Central African Republic.
Is it possible for GDP to rise while at the same time per capita GDP is falling? Is it possible for GDP to fall while per capita GDP is rising?
According to Table 19.7, how long has the average expansion lasted since the end of World War II?
According to Table 19.7, how long has the average recession lasted since the end of World War II?
According to Table 19.7, how often have recessions occurred since the end of World War II (1945)?
Without looking at Table 19.7, return to Figure 19.10. If a recession is defined as a significant decline in national output, can you identify any post-1960 recessions in addition to the recession of 2008–2009? (This requires a judgment call.)
Using data from Table 19.5 how much of the nominal GDP growth from 1980 to 1990 was real GDP and how much was inflation?
Which of the following are included in GDP, and which are not?a. The cost of hospital staysb. The rise in life expectancy over timec. Child care provided by a licensed day care centerd. Child care provided by a grandmothere. The sale of a used carf. The sale of a new car g. The greater variety of
Country A has export sales of $20 billion, government purchases of $1,000 billion, business investment is $50 billion, imports are $40 billion, and consumption spending is $2,000 billion. What is the dollar value of GDP?
Say that the government is considering a ban on smoking in restaurants in Tobaccoville. There are 1 million people living there, and each would benefit by$200 from this smoking ban. However, there are two large tobacco companies in Tobaccoville and the ban would cost them $5 million each. What are
Occupy Wall Street was a national (and later global) organized protest against the greed, bank profits, and financial corruption that led to the 2008–2009 recession. The group popularized slogans like “We are the 99%,” meaning it represented the majority against the wealth of the top 1%. Does
AT&T spent some $10 million dollars lobbying Congress to block entry of competitors into the telephone market in 1978. Why do you think it efforts failed?
What are some alternatives to a “first past the post”system that might reduce the problem of voting cycles?
The United States currently uses a voting system called “first past the post” in elections, meaning that the candidate with the most votes wins. What are some of the problems with a “first past the post” system?
Is pork-barrel spending always a bad thing? Can you think of some examples of pork-barrel projects, perhaps from your own district, that have had positive results?
How is it possible to bear a cost without realizing it? What are some examples of policies that affect people in ways they may not even be aware of?
To ensure safety and efficacy, the Food and Drug Administration regulates the medicines that are allowed to be sold in the United States. Sometimes this means a drug must be tested for years before it is allowed to reach the market. The winners in this system are easily identifiable as those who
Special interests do not oppose regulations in all cases. The Marketplace Fairness Act of 2013 would require online merchants to collect sales taxes from their customers in other states. Why might a large online retailer like Amazon.com support such a measure?
Special interest groups are often made up of representatives of competing firms. Why are competitors sometimes willing to cooperate in order to form lobbying associations?
When Microsoft was founded, the company devoted very few resources to lobbying activities. After a high-profile antitrust case against it, however, the company began to lobby heavily. Why does it make financial sense for companies to invest in lobbyists?
Given that rational ignorance discourages some people from becoming informed about elections, is it necessarily a good idea to encourage greater voter turnout? Why or why not?
What are some possible ways to encourage voter participation and overcome rational ignorance?
What are some reasons people might find acquiring information about politics and voting rational, in contrast to rational ignorance theory?
How does a government agency raise revenue differently from a private company, and how does that affect the way government decisions are made, compared to business decisions?
Why does a voting cycle make it impossible to decide on a majority-approved choice?
Why do legislators vote for spending projects in districts that are not their own?
How can pork-barrel spending occur in a situation of majority voting when it benefits only a small group?

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Principles Of Economics 2nd Edition Steven A. Greenlaw: University Of Mary Washington, David Shapiro: Pennsylvania State University - Solutions

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