Describe three theoretical causes of inflation in the short

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Reference no: EM133200032

Assignment:

1. The indicator Gross Domestic Product is used across the world to evaluate the output of economies. Please give me the formal definition of GDP, and then in a single sentence tell me explicitly what exactly GDP measures.

2. Explain to me how we can measure the amount of GDP from both the income side and the expenditure side, using as your example a trip to your local Chipotle.

3. Let's say we look at data for GDP and find the following: GDP in 2021Q1 was 100; GDP in 2021Q4 was 96; and GDP in 2022Q1 was 98. Did GDP rise or fall in the first quarter of 2022?

4. Assume that we compute current dollar GDP for 2022Q1 and find that it rose roughly 7% from 2021Q1. But we also find that general prices rose over the same period by 8%. Is the country better off, worse off, or about the same when it comes to real output? Explain.

5. Why does it make sense for macroeconomists to focus on the "labor force" rather than the total population when considering the role of people production?

6. The Federal government of the U.S. measures labor data through two surveys, one of households and one of establishments. Is this not redundant and a waste of money, or can such sampling be justified when analyzing the economy?

7. Given what Non-farm Payroll Employment (NFPE) is trying to measure, does it make sense to exclude the self-employed from the number?

8. Several countries in Europe along with Japan have either a falling population or one with a zero growth rate. Would you expect their target level of NFPE to higher, lower, or equal to a country with a growing population? Explain.

9. What is the difference between a change in relative price and a change in general price? Give an example of each to make you point.

10. From May 20121 until May 2022 the average price of gasoline at the pump in the US jumped from $3.02 to $4.59 per gallon. Is this rise in price of this one product, in and of itself, considered inflation?

11. Describe the difference in calculation of the headline rate of consumer inflation and the core rate of inflation.

12. Would unions fighting with management trying to get the highest raise possible in real terms be best served to use the headline rate or the core rate as a measure of inflation when negotiating a contract?

13. Why is the core CPI better suited for understanding inflationary pressures than the headline CPI?

14. List and briefly describe three theoretical causes of inflation in the short run.

Attachment:- Accounting for the economy.rar

Reference no: EM133200032

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