Use the information provided below to complete the questions. Total points = 100.
Suppose that data below corresponds to the small nation of Cruzville with a population of 189 people. Of the 189 residents 57 are under 16 years of age, and 11 are institutionalized adults. People in the last two categories are not considered to be in the labor force. Of the remaining 121 residents, 16 are without jobs and have given up searching for a job, 6 do not have a job, but are actively seeking work, 20 work part time, and the rest work full time. Over the years, the natural rate of unemployment has been found to be 7%. In 2014, the consumer price index (CPI) was 112, and in 2015 the CPI was 130.
2. According to table 2 in the GDP background information handout, what are the subcategories of Personal Consumption Expenditures? (8 points)
3. According to table 2 in the GDP background information handout handout, what are the subcategories of Gross Private Domestic Investment? (8 points)
4. Use the data provided in Table 1 (above), to calculate (show your work) the following macro aggregates: a) Personal Consumption Expenditures, b) Gross Private Domestic Investment, c) Net Exports, d) Government Purchases of Goods and Services, e) GDP using the expenditure approach & f) GDP per Capita. (18 points)
CALCULATING INFLATION & UNEMPLOYMENT
5. Cruzville economists have been using 2013 as their base year to calculate inflation.
a) What is the CPI during the base year (2013)? b) What is the CPI for 2014? c) What is the CPI for 2015? (3 points)
6. Calculate the rate of inflation for Cruzville between the base year (2013) and 2014? In other words, what was the rate by which prices increased between those years. Round the percentage to one decimal place; that is, 4.36% is 4.4%. (8 points)
7. Calculate the rate of inflation for Cruzville between 2014 and 2015? In other words, what was the rate by which prices increased between those years. Round the percentage to one decimal place; that is, 4.36% is 4.4%. (8 points)
8. How many discouraged workers does Cruzville currently have? Is this group considered to be in the Labor Force? Why or why not? (8 points)
9. Calculate the unemployment rate for Cruzville. Round the percentage to one decimal place; that is, 4.36% is 4.4%. (8 points)
10. Once you have calculated the current unemployment rate in Cruzville, what is the corresponding “employment rate”. In other words, which proportion of the labor force is considered employed? (8 points)
11. When an economy is experiencing an unemployment rate equal to the natural rate of unemployment, it is said to be at full employment. If in Cruzville, the natural rate of unemployment is 7%, what is the “full employment rate” or ratio. In other words, which proportion of the labor force is “fully employed”? (8 points)
12. According to the data, is the economy of Cruzville of performing at, above or below full employment? Explain. (7 points)
INSTRUCTIONS FOR SUBMITTING YOUR RESPONSES
Type your response on a Microsoft Word file (.doc file), save it, and upload it through D2L. You MUST submit your response to the appropriate assignment folder by the due date. Work turned in using any format other than MS Word (.doc), may not be graded. In addition, work turned in late, via email, in my mailbox or in class WILL receive NO CREDIT. Consideration MAY be given on late assignments for valid documented emergencies.
To submit your response, you will need access to internet, and a computer with proper software, if you don’t, you can use any of the “open lab” computers at any BC Learning Resource Center or in public libraries. No consideration will be given for not having access to the hardware, software or any other resource required to access the D2L platform.
Your response will be evaluated in accordance to the following Intellectual Standards; Clarity, Accuracy, Precision, Relevance and Logic. For more information review the assignment rubric.
THINGS TO CONSIDER…
You should only attempt to complete this assignment once you have finished reading, and reviewing (including taking notes) all of the textbook content for chapter 5 and 6. The background handout provided is useful but it should not be the only your only reading source. An assignment of this nature may require 2 hour of reading, 1 hour to figure out the right answers and another 10 minutes to compose, edit and submit your MS Word file.
You should also be familiar with the Intellectual Standards, which are explained in the “Start Here” Unit, and also reviewed in part below.
The following Intellectual Standards; Clarity, Accuracy, Precision, Relevance and Logic, will be used to grade your response. In other words, your grade will depend on how clear, accurate, precise, relevant and logical your response is. As you write and draft your response, use the questions below to solicit or achieve each standard.
- CLARITY: Could you elaborate further on that point? Could you express that point in another way? Could you give me an example?
- ACCURACY: Is that really true? How could we check that? How could we find out if that is true?
- PRECISION: Could you give more details? Could you be more specific?
- RELEVANCE: How is that connected to the question? How does that bear on the issue?
- LOGIC: Does this really make sense? Does that follow from what you said? How does that follow?