ECON 1BB3 Lecture Notes - Lecture 7: Tim Hortons, Homeless Shelter, Money Supply

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lilacrabbit901

5 May 2016

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McMaster University

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Economics

Course

ECON 1BB3

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ECON 1BB3 Full Course Notes

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Electrician is unemployed, high school student isn"t an adult yet, bank robber is in an. Institution, and is part of canadian adult population. Mv = py py = nominal gdp, y = real gdp. P = price level = py/y = nom gdp/real gdp = 1000 billion/500 billion = 2 billion: suppose velocity is constant and economy"s output of goods/services rise by 5% per year. Growth rate is approximately equal to sum of individual growth rates. If m and v stay constant, then (p)(y) stays constant. Mv = py in this case, real gdp (y) goes up 5%, price level stays same, velocity stays same. billion x 1. 05 = . 5 billion: what money supply should the bank of canada set next year if inflation rate is 10% Mv = py velocity is constant, real gdp goes up 5%, price level goes up 10% Therefore , money supply must go up 15% billion x 1. 15 = . 5 billion.

Related Questions

Based on the criteria used by the Bureau of Labor Statistics (BLS), identify each personâs status as employed, unemployed, ânot in the labor forceâ (if not in the civilian labor force but still part of the adult population), or ânot in the adult populationâ if not in the civilian adult population.

Kenji is a 71-year-old professor. He teaches only one or two courses a year, but he's still pursuing an active research agenda.

Lucia is a 27-year-old recent college graduate. She did not work for pay last week, but she had two job interviews.

Paolo is a 39-year-old graphic designer who is taking 2 years off from work to care for his small daughter.

Amy is a 26-year-old who lost her job as a copy editor for a local newspaper. She has spent the past few weeks out of work and interviewing for other editing jobs. She is thinking about going back to grad school if her job search doesn't succeed after a few more weeks.

Van is a 17-year-old who just graduated from high school. He is taking it easy this summer, relaxing by the pool with his friends and family, and volunteering part-time at the local nursing home.

Sharon is a 11-year-old student at West Valley Middle School. She babysits her younger sister and does other chores, so her parents give her an allowance of $20 per week.

Part 1:
Define each one as either employed, unemployed, not in the labor force, not in the adult population.

1) Felix is a 25-year-old professional tennis player. When he's not competing, he works as a coach at a local tennis club.
2) Janis is a 12-year-old student in Middle School. She babysitter younger brother and does other chores, for which her parents give her an allowance of $30 per week.
3) Rajiv is a 30-year-old who lost his job as a copyeditor for a local newspaper. He has spent the past few weeks out of work interviewing for other editing jobs. If his job search doesn'tsucceed after a few more weeks, he is thinking about going back to grad school.
4) Meagan is an 18-year-old who just graduated from high school. She is taking it easy this summer, relaxing by the pool with her friends, and volunteering part-time at a nursery.

Part 2:
The table below contains U.S. employment information from February 2008.
Civil Non-Institutional Population (16 years andolder)=232,809,00
Employed=145,993,000
Unemployed=7,318,000
Discouraged=396,000

The BLS has several measures of joblessness in addition to the official unemployment rate. One alternative in the U-4 measure of labor underutilized, which is calculated at the following:
U-4=(unemployed+discouraged)/(Labor force+discouraged)*100

Official Unemployment Rate=?
The U-4 measure of Labor underutilized=?

Part 3(connected to part 2):
The official unemployment rate and the U-4 measure of laborunderutilized are 2 different measures of joblessness in the economy. If the BLS were to include discouraged workers in the official unemployment rate, the reported unemployment rate would(increase/decrease).

Part 4:
Frictional Unemployment: 1.0%
Cyclical Unemployment: 0.8%
Structural Unemployment: 4.1%
Total Unemployment: 5.9%
Using the table above: True or False. The economy is currently at its natural rate of unemployment?

Part 5:
Define as either Structural, Frictional, or CyclicalUnemployment

1) Automobile demand as fallen during a recent recession, and Haley has been laid off from her job on the assembly line (I think it's cyclical but I'm not too sure)
2) Jack recently lost his job as a waiter at a local restaurant. A recent increase in minimum wage keeps local employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work. He continues to look for a job but reconsidering going back to school for vocational rate. (I think it's structural but not sure)

Part 6:
Suppose the world price of steel falls substantially. The demand for labor among steel production firms in Pennsylvania(increase/decrease). The labor demand among automobile producing firms in Michigan, for which steel is an input, will(increase/decrease). The unemployment resulting from such sectional shift in the economy is best described as(cyclical/structural/frictional/seasonal) unemployment.

I think it's decrease, decrease, and cyclical but not too sure.

Part 7:
Which of the following policies would reduce the natural rate of unemployment in the economy. More than one can apply.

1) An improvement to a widely used job-search website that allows it to match works to job vacancies more effectively.
2) Establishing government-run employment agencies to connect unemployed workers to job vacancies.
3) Offering recipients of unemployment insurance a cash bonus if they find a new job within a specified number of weeks

plumdog25

Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following activities is either not accounted for or are measured inaccurately in calculations of GDP for the United States? Check all that apply.

-Funds spent by city governments to renovate their buildings

-The costs of air and water pollution

-The Brazilian wood that is used for flooring in a new U.S. house

-The leisure time enjoyed by Americans

-The value produced by doing your own laundry

2.

Consider a small economy composed of six people: Clancy, Eileen, Hubert, Kate, Poornima, and Manuel. Each person's employment status is described in the following table.

Based on the criteria used by the Bureau of Labor Statistics (BLS), identify each person's status as employed, unemployed, not in the labor force, if not in the civilian labor force but still part of the adult population, or not in the adult population if not in the civilian adult population.

Person	Status
-Clancy is a 20-year-old professional tennis player. When he's not competing, he works as a coach at a local tennis club.
-Eileen is a 36-year-old autoworker who was just laid off by her employer. She is trying to find any kind of job to help make ends meet.
-Hubert is a 79-year-old retired professor. He enjoys volunteering at the local public library.
-Poornima is a 29-year-old who lost her job as an associate producer for a radio station. After spending a few weeks out of work and interviewing for several other positions, she gave up on her job search and decided to go back to grad school. She made that decision a few months ago.
-Manuel is a famous novelist. He is spending the summer at his lake house in upstate New York, doing a little writing each day but mostly spending his time gardening and reading.
-Kate is an 11-year-old student at East Valley Middle School. She baby-sits her younger brother and does other chores for which her parents give her an allowance of $30 per week.

Initially, Ana earns a salary of $300 per year and Yakov earns a salary of $200 per year. Ana lends Yakov $100 for one year at an annual interest rate of 16% with the expectation that the rate of inflation will be 12% during the one-year life of the loan. At the end of the year, Yakov makes good on the loan by paying Ana $116. Consider how the loan repayment affects Ana and Yakov under the following scenarios.

Scenario 1: Suppose all prices and salaries rise by 12% (as expected) over the course of the year. In the following table, find Ana's and Yakov's new salaries after the 12% increase, and then calculate the $116 payment as a percentage of their new salaries. (Hint: Remember that Ana's salary is her income from work and that it does not include the loan payment from Yakov.)

- Value of Ana's new salary after one year?

-The $116 payment as a percentage of Ana's new salary?

-Value of Yakov's new salary after one year

-The $116 payment as a percentage of Yakov's new salary

Scenario 2: Consider an unanticipated decrease in the rate of inflation. The rise in prices and salaries turns out to be 2% over the course of the year rather than 12%. In the following table, find Ana's and Yakov's new salaries after the 2% increase, and then calculate the $116 payment as a percentage of their new salaries.

-Value of Ana's new salary after one year

-The $116 payment as a percentage of Ana's new salary

-Value of Yakov's new salary after one year

-The $116 payment as a percentage of Yakov's new salary

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ECON 1BB3 Lecture Notes - Lecture 7: Tim Hortons, Homeless Shelter, Money Supply

ECON 1BB3 Full Course Notes

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