What is an escalator cause and how does this benefit jeremy

Reference no: EM133480446

Assignment: Macroeconomics for Managers

Problem Set I

Listen to these two podcasts (9 min each) by Planet Money, discussing these various arguments.

The unemployment rate is low. Are we at full employment? : The Indicator from Planet Money : NPR
Jobs Friday: A Crash Course On Six Unemployment Rates : The Indicator from Planet Money : NPR

In a discussion post, elaborate on whether the unemployment rates calculated by the Bureau of Labor statistics are the best measure for determining economic health. Your response should reflect your own, well-reasoned opinion.

Feel free to reference the above podcasts in your responses. You are also welcome to conduct your own research, but be sure you cite any statistics or statements included in your post.

A well-reasoned response will include a discussion of the pros and cons of various measures:

A. What are the drawbacks of using U-3? What are the benefits?
B. If we were to consider an alternative measure, what would you choose and why?
C. Is our economy currently healthy?

Supply citations for any article cited or referenced in your post.

Problem Set II

A. Suppose Jeremy has an escalator clause in his contract that specifies his salary will be increased annually with inflation, as measured by the consumer price index (CPI). Suppose the CPI rose from 110 to 125 from 2021 to 2022.

1. What is an escalator cause and how does this benefit Jeremy?

2. By how much would his income go up in 2022 if he made $68,500 in 2021? Round your answer to the nearest whole dollar.

3. How does accelerating inflation affect the purchasing power of her money?

B. Use the table below to answer the following questions.

Year	Nominal GDP	Real GDP	GDP Deflator	Inflation Rate
2020	$50,300	$49,500
2021	$51,200	$49,400
2022	$53,500	$52,100

*($ billions)

1. Using the data from the table, fill in the last two columns (GDP Deflator & Inflation Rate) for each year. SHOW YOUR WORK.

2. Based on the data in the table, explain what happened to output and prices in the economy between 2020 and 2021.

C. Into which of the three categories-employed, unemployed, out of the labor force-would an interviewer for the Current Population Survey place each of these people?

1. Shonda Rhimes is working as a producer, screenwriter, and author.

2. Morty Smith works for his uncle, Rick Sanchez, 18 hours a weekfighting interdimensional space aliens and protecting our reality. Morty is not paid for his work.

3. Elle Woods is attending law school full-time to earn her law degree and show Warner Huntington III she is not just a pretty face.

4. Jack Black is starring as a substitute teacher in a new film, School of Rock, but is not on the film set because he is at home sick with the flu.

5. Erin Brockovich does not currently have a job. She was injured in a car wreck and cannot work. She also has not looked for work this past month.

6. Andy Sachs wants to be a journalist. However, she cannot find a job after graduating, despite her many applications. She is considering taking the job of personal assistant to Miranda Priestly while she continues to search for a journalist position.

D. The city of Rivendell has a population of 4,000 elves. 300 elves are children, and 40 elves are active-duty members of the elven army. 2,500 elves are working full-time and 300 are working part-time. 250 elves are not currently working, but only 200 of these have looked for work in the last month.

1. What is the size of the labor force of Rivendell?
2. How many elves are unemployed (by the official BLS definition)?
3. How many elves are employed (by the official BLS definition)?
4. What is Rivendell's official unemployment rate?
5. What is Rivendell's official employment rate?
6. What is Rivendell's labor force participation rate?

Reference no: EM133480446

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