Seeking macroeconomics help..

Discussion in 'Homework Help' started by kmjt, Jan 22, 2011.

Seeking macroeconomics help..
  1. Unread #1 - Jan 22, 2011 at 5:41 PM
  2. kmjt
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    kmjt -.- The nocturnal life chose me -.-
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    Seeking macroeconomics help..

    I have a few macroeconomic homework questions which I didn't quite get..

    .

    I found out what happens to the GDP but i'm not really sure why it happens:

    a) GDP increases
    b) No affect on GDP
    c) GDP increases
    d) No affect on GDP
    e) GDP decreases since the Canadian government is paying outside of the country for a good.

    I think I got the reason for e, but what are the other reasons?


    I'm not really sure how to find the GDP. I'm assuming I have to add a bunch of these up. So starting from the top, if consumption expenditures is $600 do I add $600 to GDP? And add 75 from exports on top of that? I'm not sure about many of them. Would imports mean I subtract 50 from the GDP? And isn't Household purchases of durable goods fall under Consumption expenditures? :confused:


    I don't really have any clue how to do this ;)


    From my book I know that:

    participation rate = labour force / working-age population

    However we only know participation rate so we can't find the other 2..

    Also from my book:

    labour force = employed workers + unemployed workers

    We are given none of this info..

    And lastly from my book:

    unemployment rate = unemployed workers / labour force

    All we are given is unemployment rate..

    How would I figure the labour force, working-age population, number of employed workers, and number of unemployed workers out?
     
  3. Unread #2 - Jan 22, 2011 at 11:49 PM
  4. blahbleh
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    blahbleh Active Member

    Seeking macroeconomics help..

    1.
    a - money is paid from produced work, new value (goods & services) is added to economy.
    b - money is given to insurance which is not really paying for new value. no new value is added to economy.
    c - building airport added value to economy.
    d - bond was new goods and services when it was bought. After being bought, bond is not new anymore, thus interest paid for bond does not add new value.
    ----> the key is newly added value or not.

    2. Use the formula: GDP = Consumption + Investment + Government Spending + (Export - Import)

    3. Use GDP Deflator formula: GDP Deflator = (Norminal GDP/Real GDP)*100
    99.1 = (928.3*100)/Real GDP
    Solve this and you get Real GDP of 936.73 for 1998

    4. Participation rate is 62.5%, so non-participation rate is 37.5% (100-62.5).
    "Non-participation rate" means "not in the labour force". 37.5% is 60 million, so 62.5% is 100 million. So the labour force is 100 million.

    Use the formula "participation rate = labour force / working-age population", we have 62.5%=100/working-age population. Solve this and we get working-age population of 160 million.
    Unemployment rate is 5%, so employment rate is 95%. 95% * 100 million (labour force) = 95 million. Number of employed workers is 95 million, number of unemployed workers is 5 million.

    Hopefully I did not make any stupid mistake.
     
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