Uncategorized

You may have heard a recession defined as two consecutive quarters of declining real GDP. In fact, though, the NBER does not use this rule of thumb in dating recessions. According to the NBER, the U.S. economy was in a recession from March 2001 to November 2001. The following table shows the growth rate of […]

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze the natural rate of unemployment. a. Download quarterly data on the natural rate of unemployment (NROU) from 1950 to the present. Chart the data series in a graph. b. The U-3 unemployment rate rose from 4.8% during the fourth quarter of 2007 when then

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed. org/fred2/), analyze CPI (the consumer price index) and wages. a. Find the most recent values and the values from one year earlier from FRED for the Consumer Price Index for All Urban Consumers: All Items (CPIAUCNS) and Average Hourly Earnings of Production and Nonsupervisory Employees:

One possible explanation for higher naturalrates of unemployment in Western Europe than the United States is stronger labor unions (see Chapter 8). Strong labor unions may also increase the severity of a business cycle by increasing wage stickiness. Draw a graph of the aggregate labor market in equilibrium. Then assume that the demand for labor

What are sticky prices? What are two key factors that cause price stickiness? What effect might sticky prices have on an economy that has experienced a macroeconomic shock?

What is an expansion? What is a recession? What is a macroeconomic shock? How do macroeconomic shocks relate to the business cycle? “Does the business cycle impose significant costs on the economy?”

How is the output gap measured?Briefly discuss the reasons for macroeconomic stability in the United States from 1950 until the start of the recession of 2007–2009. Explain why the costs of the business cycle do not always average out over the cycle.

Consider the following statement: “If all nominal wages and prices adjusted instantly, there would be no business cycle.” Do you agree with this statement? Briefly explain.

The following table shows data on the quarterly growth rate of real GDP for the U.S. economy: a. Using the rule-of-thumb definition of a recession, did this economy experience any recessions during this period? Briefly explain. b. The NBER says that a recession began during the fourth quarter of 1973 and ended during the first

Write two of the half-page worth essays. (One half-page essay for each topic)Topic 1. Statistics and ReliabilityIn this modern age, we are inundated with statistics (e.g., 50% of marriages end in divorce), so much so that many accept them at face value. Do you think statistics are a reliable source of data? Do you think,