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ECO Individual Assignment 1

The document contains answers to 6 questions about macroeconomics principles. It calculates unemployment rates, discusses how the internet can reduce frictional unemployment, and how unemployment insurance can increase unemployment. It also contains calculations of GDP contributions and percentage changes in CPI.

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Tham Tram Anh (K16HL)
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39 views2 pages

ECO Individual Assignment 1

The document contains answers to 6 questions about macroeconomics principles. It calculates unemployment rates, discusses how the internet can reduce frictional unemployment, and how unemployment insurance can increase unemployment. It also contains calculations of GDP contributions and percentage changes in CPI.

Uploaded by

Tham Tram Anh (K16HL)
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name: Thẩm Trâm Anh

Student ID: HS160912

ECON 121: MACROECONOMICS PRINCIPLES


INDIVIDUAL ASSIGNMENT
Question 1: In the town of Gotham the adult population is 560 thousand, the number
unemployed is 25 thousand, and 185 thousand are not in the labor force. Calculate the
unemployment rate.
Labor force = Population - Not in labor force
= 560 - 185
= 375
¿ of unemployed
U-rate = 100 x
labor force
25
= 100 x
375
= 6.67 %

Question 2: Provide a reason why Internet might help reduce frictional unemployment.
With the Internet, job seekers can use social media or job posting sites to find out about jobs
at different companies and get in touch with relative ease. Searching on the Internet will be
quicker and more convenient than trying to find a list of employers and then looking up the
phone numbers of the human resources departments to request job listings and
applications, ...

Question 3: How does unemployment insurance affect rate of unemployment (increase or


decrease)? Why?
Unemployment insurance (UI) is a government program that partially protects workers’
incomes when they become unemployed.
UI increases unemployment (frictional unemployment). UI benefits end when a worker takes
a job, so workers have less incentive to search or take jobs while eligible to receive benefits.

Question 4: A farmer sells sugar to a candy producer for $150. If the producer uses this
sugar to make candy that sells for $200, what is the total contribution to GDP from these
transactions?
- The total contribution to GDP from these transaction will rise by 200$.
Question 5: Last quarter Newton computers produced 3,000 computers. Two thousand of
these
computers were sold to households, 750 were sold to businesses, and 250 were added to
Newton’s inventory. How many of the computers should have been included in last quarter’s
GDP?
- 3000

Question 6:
In a simple economy, people consume only 2 goods, food and clothing. The market basket
of goods used to compute the CPI consists of 50 units of food and 10 units of clothing.
Food Clothing
2002 price per unit $4 $10
2003 price per unit $6 $20

a. What are the percentage increases in the price of food and in the price of clothing?
b. What is the percentage increase in the CPI?

6−4
a.  The price of food increased: x 100% = 50%
4
20−10
The price of clothing increased : x 100% = 100%
10

b. Basket : 50 units of food, 10 units of clothing.


Food Clothing Cost of basket
2002 $4 $10 $4 x 50 + $10 x10 = 300$
2003 $6 $20 $6 x 50 + $20 x 10 = 500$

500−300
- The percentage increase in the CPI: x 100% = 66.7%
300

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