Econonics

Unit 5 Written Assignment

1. Labor force equals all us residents minus residents under 61 minus institutionalized adults minus adults not looking for work. No because we do not include all the migrant & illegal aliens doing a lot of the jobs Americans don’t want to take on because of their unwillingness to lower their standards.

4. Frictionally and Structurally unemployed can be reduced by providing job training and counseling. Cyclically unemployed is part of the business cycle and will increase and decrease as the cycle revolves.

7. $11 and no nominal income is not keeping up with the cost of living because inflation will not allow this to happen.

8. Real interest rate= nominal interest rate – rate of inflation. You have a bank loan for 10% interest. The inflation rate is 13% so you are only paying 7% for a loan with a 10% interest rate.

9. The rate adjust more than the expected inflation rate thus they don’t lose any money.

10. Yes in about a six month period there is the peak then a contraction. Then you go into a trough then began an expansion again. This is an ongoing process that has been happening since the 1960 according to figure 1.

13. A. 100% B. It doubled in cost.

1. Aggregate demand curve is used to determine an equilibrium price level and quantity of goods and services produced for the entire economy not just a single item such as a hamburger as in the demand curve.

3. Foreign income increase foreign spending. This increases domestic exports and aggregate demand increase as well.

15.

A. Aggregate demand and supply will decrease due to consumer confidence will be decreased.

B. Domestic exports rise, aggregate demand increase

C. Domestic exports fall, aggregate demand decreases

D. Aggregate demand increases

E. Aggregate will be lower and supply since they will try to hold out for the inflation to see if the raise was beneficial

F. Aggregate demand and supply should increase with new products for consumers...