Macroeconomics

Macroeconomics

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Macroeconomics

Section 1: Consumer Price Index

1. Food = (12-8)/8*100 = 50%

Clothing = (40-20)/20*100 = 100%

66. Food = (8/12)*100 = 66.6%

Clothing = (20/40)*100 = 50%

1. The CPI changes will not affect all customers in the economy. This is because high-income earners in the market are not likely to feel the impact. Therefore, low-income earners are the ones that are likely to get affected by the changes in the market. This implies that the common man in an economy is the one that is often affected by the increase in commodity prices.

Section 2: Chances in price and CPI

1. Ticket Price = (180*$0.30)/18 = $3
2. Cooks Earnings = (180*$20)/14 = $257.14
3. Gas price = (180*0.20$)/16 = $2.25

Section 3: Employment and Unemployment

1. The government measures employment and unemployment by tallying the number of people in the formal and informal sectors. The numbers of the unemployed are often underestimated because of the fact that they do not account for all informal areas like those in seasonal employment can be considered unemployed. Therefore, there exist no proper measures to account for the small sectors in the economy that account for many self-employed individuals. Besides, accounting for the private sector has been difficult as many employers have avoided providing the precise figures of their number of workers as a way of avoiding heavy taxation from the government.
2. Economic wellbeing is useful when the rate of employment is high in an economy. This implies that country A tends to have better economic standards followed by C and B. This means that the rate of unemployment needs to be a law to allow for developmental activities that are attained through a large labor force in an economy. Besides, when a high number is employed in an economy, there is a higher likelihood of achieving a higher GDP in the country because of the increased output in the market.

Section 4: Changes in Real GDP per capita

1. 026
2. 037
3. (0.037-0.026)/0.026 *100 = 42.3%

Section 5: Application of Macroeconomic Aggregates

The overall economy is often affected by the small changes that usually arise. For example, the CPI tends to affect the prices of goods in an economy ending up affecting the consumer. In this case, the CPI is used to determine the living standards of individuals in a given economy. On the other hand, high unemployment is likely to destabilize an economy because of low production in terms of output, indicating a lower GDP. Therefore, the United States national economy is dependent on the population, and thus measures and policies by the government should be in favor of achieving a sustainable economy.

1. /18 = $3
2. Cooks Earnings = (180*$20)/14 = $257.14
3. Gas price = (180*0.20$)/16 = $2.25

Section 3: Employment and Unemployment

1. The government measures employment and unemployment by tallying the number of people in the formal and informal sectors. The numbers of the unemployed are often underestimated because of the fact that they do not account for all informal areas like those in seasonal employment can be considered unemployed. Therefore, there exist no proper measures to account for the small sectors in the economy that account for many self-employed individuals. Besides, accounting for the private sector has been difficult as many employers have avoided providing the precise figures of their number of workers as a way of avoiding heavy taxation from the government.
2. Economic wellbeing is useful when the rate of employment is high in an economy. This implies that country A tends to have better economic standards followed by C and B. This means that the rate of unemployment needs to be a law to allow for developmental activities that are attained through a large labor force in an economy. Besides, when a high number is employed in an economy, there is a higher likelihood of achieving a higher GDP in the country because of the increased output in the market.

Section 4: Changes in Real GDP per capita

1. 026
2. 037
3. (0.037-0.026)/0.026 *100 = 42.3%

Section 5: Application of Macroeconomic Aggregates

The overall economy is often affected by the small changes that usually arise. For example, the CPI tends to affect the prices of goods in an economy ending up affecting the consumer. In this case, the CPI is used to determine the living standards of individuals in a given economy. On the other hand, high unemployment is likely to destabilize an economy because of low production in terms of output, indicating a lower GDP. Therefore, the United States national economy is dependent on the population, and thus measures and policies by the government should be in favor of achieving a sustainable economy.