Macroeconomics Problem Set 1 Essay

626 Words Oct 10th, 2014 3 Pages
Amanda Taliaferro
ECON214-B12
Problem Set #1
August 26, 2014
Problem Set 1
Complete all questions listed below. Clearly label your answers.

1. The receipts and year of release of the five movies with the largest nominal box office revenues, along with the CPI data of each year are presented below. Assuming that the receipts for each of the movies were derived during their year of release, convert the receipts for each to real dollars for the year 2010 (2010 CPI 218.1). Put the movies in order from largest to smallest real box office receipts. Movies | NominalBox Office Receipts (millions) | Year Released | CPI in Year Released. | Avatar | $760.50 | 2009 | 214.5 | Titanic | 600.8 | 1997 | 160.5 | Star Wars | 461 |
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Population age 16 and over | 15,000 | Labor force | 7,300 | Not currently working | 4,500 | Employed Full-time | 5,000 | Employed Part-time | 1,100 | Unemployed. | 1,200 | | | A. Labor force participation rate= 48.67% B. Unemployment rate= 16.44% C. Emploment/Population ratio= 40.67%
4. Consider an economy with the following aggregate demand (AD) and short-run aggregate supply (SRAS) schedules. Decision-makers have previously made decisions anticipating that the price level during the current period will be P105.

a. Indicate the quantity of GDP that will be produced during the period.
The quantity during the current period is 5400. b. Is it a long-run equilibrium level of GDP? Why or why not?
Yes, it is considered a long-run equilibrium level because the AD and the SRAS intersect. c. How will the unemployment rate during the current period compare with the natural rate of unemployment? It will be in line with the natural rate of unemployment because the natural rate occurs when the aggregate supply of labor is equal to the aggregate demand for labor, which would occur in a time of equal AD and SRAS. d. Will the current rate of GDP be sustainable into the future? Why or why not? No, it is not sustainable into the future; in order for an economy to grow the levels of supply

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