...Chapter 15 Question 11 Year | C% | I% | G% | X-M% | 1965 | 61.7 | 16.4 | 21 | .77 | 1975 | 63.1 | 14 | 21.8 | .97 | 1985 | 64.4 | 17.4 | 20.8 | -2.7 | 1995 | 67.2 | 15.4 | 18.5 | -1.2 | 2005 | 70.1 | 16.5 | 19 | -5.7 | a. Which component of GDP is the most stable? Look for the smallest change from the year with the smallest contribution to GDP to the year with the largest contribution. It is gross private domestic investment. b. Which is the most volatile as a percent of GDP? The most volatile is net exports. c. Ignoring net exports, which component has grown the fastest as a percent of GDP since 1965? Consumption has grown the fastest as a percent of GDP since 1965. Chapter 15 Question 14 14. What are some of the limitations of the national income accounts in how they represent our standard of living? NIPA has some shortcomings. For instance, the national accounts ignore most nonmarket transactions: If a maid cleans your condo, GDP rises, but if you do the same job yourself, GDP is unaffected. And NIPA fails to account for the environmental impact of economic activity. Chapter 16 Question 5 5. Why is frictional unemployment important to have in any economy? Unemployment is split into three types. When people are temporarily unemployed because they are switching jobs, they are said to be frictionally unemployed. Frictional unemployment is short term, and it exists because there are always some workers who are voluntarily or involuntarily changing...
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...Chapter 15, Question 14 National income and output are used in economic studies to estimate the value of goods and services produced in an economy a snapshot of a country’s economic activity. A system of national account is employed to account for and record economic changes. National income is calculated using a variety of different methods. Some of the more popular methods include GDP (Gross Domestic Product), GNP (Gross National Product), NNP (Net National Product), NNI (Net National Income) PI (Personal Income) and PDI (Personal Disposable Income), among many others. National income statistics provide us with a numerical comparison of one country’s economic situation with another country’s economic situation. Easily economic growth of countries can become pared over time or at a particular snapshot in time. National income accounts also provide government agencies and private businesses with a tool for economic planning and budgeting. What’s more is this information provides a comparison with the standard of living from one country to another. Many issues arise with accounting for the true national income of any country. Certainly there is a concern for double-counting, for example the outputs of one business are the inputs of another business. If both are accounted for separately and added to the final numbers, the final numbers may be exacerbated by the inaccuracies of merging the accounts. Undoubtedly there are controls in place to avoid such in accuracies. Using...
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...Chapter 16, Question 6 According to Stone, hyperinflation occurs when the inflation rate is extremely high and this high rate can have a devastating effect on the economy (436). These increases happen quickly and happen because it goes unchecked. The inflation rates in under hyperinflation usually go to 100% rate to as much as 1000% (economicshelp.org). What causes hyperinflation could be excessive government spending of tax revenue (high deficits) along with printing of money to finance these deficits (Stone 436). Why is this devastating? One reason, if there is not enough tax revenue collected and too much currency being printed, this can cause the value of currency to decline and at the same time prices increase. When this happens, the value of savings is quickly reduced and the value of investments begins to fall. What this means is, the rate of inflation goes above the interest rate of savings accounts and investment accounts (economicshelp.org). After a while, currency, the banks, pensions and other financial instruments become worthless. If hyperinflation is at its worse, families or workers themselves rush to the stores and buy anything they can use the money to purchase. This can cause people to begin hoarding of necessities. Once this occurs, you can no longer have a monetary system and stores and people turn to bartering (Stone 436). There is no longer a monetary system because the precious metals (gold, silver, etc.) and foreign currency that have...
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...Keller Graduate School of Management Business Economics GM545 Online Graduate Course Summer Session A, July 2010 Project Part 2 7 August 2010 Exercise 1: Chapter 15, Question 14 (textbook page 424) National income and output are used in economic studies to estimate the value of goods and services produced in an economy—a snapshot of a country’s economic activity. A system of national accounts is employed to account for and record economic changes. National income is calculated using a variety of different methods. Some of the more popular methods include GDP (Gross Domestic Product), GNP (Gross National Product), NNP (Net National Product), NNI (Net National Income) PI (Personal Income) and PDI (Personal Disposable Income), among many others. [ (Investopedia ULC 2010) ] National income statistics provide us with a numerical comparison of one country’s economic situation with another country’s economic situation. Easily economic growth of countries can be compared over time or at a particular snapshot in time. National income accounts also provide government agencies and private businesses with a tool for economic planning and budgeting. What’s more is this information provides a comparison with the standard of living from one country to another. Many issues arise with accounting for the true national income of any country. Certainly there is a concern for double-counting, for example the outputs of one business are the inputs of another business. If both are accounted...
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...Business Economics GM545 May 2012 Chapter 16 Question 5 According to our text book, frictional unemployment is used to describe he short period of time that people are unemployed between jobs. Usually it is when someone quits a job for another job that they want and there is a short period of time that the person spends between jobs. This time is referred to as frictional unemployment. Even when people quit their jobs and don’t have another one lined up it can still be referred to as frictional unemployment if they are able to find a new job within a short period of time. (Stone, Gerald. CoreEconomics. Worth Publishers, 07/2011. p. 443). Frictional unemployment is a natural part of the employment cycle. It shows us that there are choices for both employers and employees. Typically when the economy is expanding there are jobs available and people feel comfortable moving from one job to another without much fear of being unemployed for too long. Structural unemployment is the opposite of Frictional Unemployment and refers to the extended periods of time that people spend unemployed (Nayab, 2012) Both employees and employers benefit from the presence of frictional unemployment. Employers can choose from talented pool of individuals and employees can choose where they want to work from the different options available. This leads to people finding jobs that are better suited to their needs and skills. Also when people don’t feel stuck in...
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...Exercise 1 - Everyone’s Gasoline Problem It seems like gas prices change on a daily basis for the better or for worse. I spent the week studying the gas prices in my area as I drove by different gas stations. It’s amazing how the prices can different from area to area, company to company, and even the same company but just a mile few miles apart. The simplest answer is supply and demand but what actually goes into the decision making part of what gas prices should be? Research shows that 50% of the price of gas is based on the price of crude oil. This is what is refined and turned into gasoline. (Energy: demand vs. supply) Companies have to purchase crude oil to make into gasoline. This cost of purchasing the oil and refining it is then passed down to the customer. As the demand for crude oil or gas goes down, so do the prices. This can happen during recessions or when people travel less. As the demand increases, prices can go up, like during the summer when consumers travel more. Location can also contribute to the price of gas. Some locations can tend to have lower prices because of competition. They’re considered perfect competitive firms because they have to have the best price for the customer to want to come in and purchase their gas. I usually use the Safeway gas pumps instead of going across the street to the Arco station because I can receive a discount but the price is usually always three to five cents less than the Arco station. As I continue to drive to...
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...Keller Gm545 Course Project - Part 2 Keller Graduate School of Management Business Economics GM545 Online Graduate Course Summer Session A, July 2010 Project Part 2 7 August 2010 Exercise 1: Chapter 15, Question 14 (textbook page 424) National income and output are used in economic studies to estimate the value of goods and services produced in an economy—a snapshot of a country’s economic activity. A system of national accounts is employed to account for and record economic changes. National income is calculated using a variety of different methods. Some of the more popular methods include GDP (Gross Domestic Product), GNP (Gross National Product), NNP (Net National Product), NNI (Net National Income) PI (Personal Income) and PDI (Personal Disposable Income), among many others. [ (Investopedia ULC 2010) ] National income statistics provide us with a numerical comparison of one country’s economic situation with another country’s economic situation. Easily economic growth of countries can be compared over time or at a particular snapshot in time. National income accounts also provide government agencies and private businesses with a tool for economic planning and budgeting. What’s more is this information provides a comparison with the standard of living from one country to another. Many issues arise with accounting for the true national income of any country. Certainly there is a concern for double-counting, for example the outputs of...
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...Project Paper 1 Project Paper 1 Business Economics GM545 Fall 10 Semester Standard and Session B Polo_29918@yahoo.com 1/30/2011 Business Economics GM545 Fall 10 Semester Standard and Session B Polo_29918@yahoo.com 1/30/2011 Arthur Smart Arthur Smart Everyone’s Gasoline Problem We are all familiar with fluctuating prices of gasoline at the pump. Supply and demand is a major factor causing price fluctuation at the pump. The law of demand states all else being equal, as price falls, the quantity demanded rises, and as the price rises, the quantity demanded falls. This is an inverse relationship. If this statement was true concerning fuel then the consumer demand for fuel would decrease as the price increases. Obviously it is not. Supply must also be taken into account. The law of supply states that as prices rise, the quantity supplied rises, as price falls the quantity supplied falls. If demand rises or a disruption of supply occurs; pressure will be placed on the price. The inverse is also true, if a surplus exists or demand falls less pressure will be put on the price. Competition between retailers could cause prices to fluctuate. If competition does not exist and the retailer is the only player for miles the price may be higher. Oil, gold, wheat and other products are traded on a world market. The price of oil has risen because of its demand around the world. The unrest and war in Iraq and other oil producing countries has also driven prices...
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...| | Business Economics GM545 Project 2 | | Chapter 16-Question #5 Frictional unemployment Unemployment that is always present, it occurs when employees are transitioning from one place of employment to another or employees searching for new or better positions (Frictional Unemployment, 2013). Frictional unemployment is a natural part of our economy, and is considered to be necessary and beneficial. Frictional unemployment gives people time to search for jobs that they really want. It allows employers to choose the best employees to suit their demand. Without frictional unemployment, employees will be forced to continue to remain in jobs that they do not want, and employers will be forced to continue to employ employees that are not best suited for the jobs that they are in (Stone 2008). Chapter 16-Question #6 Hyperinflation is described as an extremely high rate of inflation, in the past it was thought that hyperinflation occurred when inflation was 50% a month, but now it has been redefined as when inflation is 100% per year. Hyperinflation is caused when government spending exceeds is tax revenues, and government is forced to print more money to finance these debts without concrete backing. During the peak of inflation, workers are paid hourly and they scramble to purchase whatever their earnings will allow them. In the end, money has no value, and other forms of trades such as barter takes over. This causes a distrust in the money and consumers are...
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...Course Project Paper 1 David J Marshall Business Economics GM545 Winter Term 2012 mr_marshalls@live.com Exercise 1: Microeconomics Issues: Question # 1 There are two reasons gas prices must go up. The first is to get people into coal-powered cars. Coal-powered cars can only be driven around 40 miles before they must be plugged back into the grid for more coal power. If everyone moves to coal-powered cars, the drivers will be forced to live closer to cities (Erickson, 2011). According to my current reading, when you look at the term product differentiation in buying your gas, this term gives competitors the edge to host the cheapest gas (Chapter 10:253). In the current week, the Shell gas pump went from $3.65 to $3.57 per gallon and the week before that the gas price during week 1 was $3.47 expecting to rise to $4 per gallon in Lexington, KY. During my travel to Indiana the gas prices average $3.99 per gallon. In using the midpoints of price and quantity to compute the relevant percentage changes essentially gives us the average elasticity between point (a) and point (b) (Stone, Gerald. “Core Economics” Worth Publishers, 07/2011. p. 118). My equation below may show just exactly how these price may increase or decrease based on the elasticity formula: Eᵈ = 200 / 400 ÷ 3.65 – 3.57 / (3.57 + 3.65) / 2 = 200 / 400 ÷ (- 0.08 / 5.3950) = .5 ÷ -0.0148 = [-33.72] = 33.72 I think for the most part of our gas prices has increase due to determinants of our increase...
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...PROJECT PAPER II LISA JOHNSEN BUSINESS ECONOMICS-GM545 SUMMER 2012 LCJOHNSEN@YAHOO.COM Ch. 16 Question 5 “Frictional unemployment is important to any economy because people need time to search for new jobs, and employers need time to interview and evaluate potential new employees.” (Stone, 443). This involves short-term unemployment of people who are changing jobs, careers, or locations. The people looking for jobs are the jobless and are searching but have not found a job yet. Due to the mismatch of the characteristics of supply and demand in the job market this type of unemployment exists. The characteristics mentioned previously include skills, payment, location, timing, tastes, attitudes, as well as other factors. When people hold on for the ideal job extend frictional unemployment short-term while reducing unemployment long-term because they are less likely to change jobs. The good sign of frictional unemployment is that it signifies a healthy economy. This type of unemployment can only survive in a fast-growing economy. Frictional unemployment benefits workers by giving them time to search or jobs in which they are a good-fit while allowing companies to choose from the best talent available. Absence of frictional unemployment signifies a stagnant economy; one without growth, innovation, and tires skillsets. Ch. 16 Question 6 “Hyperinflation is an extremely high inflation rate of at least 50 percent per month. Currently most economies...
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...Course Project - Part 1 This course contains two project assignments -- Project Part 1 in Week 2, and Project Part 2 in Week 5. Because of this, you will need to spend additional time and effort in Weeks 2 and Week 5. |Overview | | | | | Project Part 1 (PP1) Project Part 1 (PP1) consists of performing application-oriented exercises wherein the specific economic principles learned in this course are put to practical use. You must translate your ideas into economic analysis using the specific economic theory and economic terms contained in the TCOs covered in the course, and demonstrate that you are understanding and utilizing material from text chapters covered up to this point in the course, to receive full credit on the assignment. You are being asked to submit a report containing responses to three exercises. Exercise 1 entails a choice of one topical microeconomic issue out of two possible alternatives. Exercises 2 and 3 entail a choice of two textbook questions out of a list of possible alternatives. |Exercise 1 | | | | ...
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...Project 2 Running head: PROJECT 2 1 Project 2 kgsm Business Economic GM545 May 2011 June 06, 2011 Project 2 2 Project 2 Chapter 16, Question 5 “Separation of days” is needed to curb and continue our economic rat race. It allows the old to move out, the young to move in, while those in the middle move up, down and sideways. Understanding that full unemployment can never be achieved, voluntary and temporary unemployment serve as the lesser of the “evils”. Additionally healthy economic indicators are when citizens 1) feel confident enough to leave their existing employment, it indicates a belief in the marketplace that opportunities are abundant and 2) are experiencing short periods of unemployment. The frictional unemployment segment provides both tangible and intangible information cues for the four key indexes used to monitor inflation in the U.S. As an employer, I see the benefit of this segment because it offers me a larger pool of talent to choose from, thus improving my business. This pool of applicants ranges from graduate level college graduates, to those returning from international employment, housewives back to work, professionals who took hiatus for professional development or rejuvenation. good As an employee, the small stints of unemployment provides chances to rejuvenate, participate in professional development trainings, leave one job and get hired at another on a higher pay scale etc.. good Life as human beings evolves and revolves,...
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...Business Economics GM545 Course Project- Part 1 Exercise 1 Microeconomics Issue: Everyone’s Gasoline Problem The recent history of gasoline prices in the North East part of the country, specifically Philadelphia, PA. has been consistently declining and according to sources such as the Associated Press prices will continue to fall. (See Exhibit 1) Gasoline prices fluctuate for many reasons. The reason this happens is because of the following factors: Seasonal Demands Gas prices usually rise in the late spring and summer months because the demand for it is greater. During the summer months people drive more, they get out in the good weather, they go on vacation. In winter gasoline prices usually go back down. Not many people are driving like they do in the summer so the quantity demanded is less. Competition Gas stations change their prices to stay competitive with other gas stations. The way it is now, some days a gas station will make more, and some days it will make less. Unfortunately, in the short run there are no substitutions for consumers to replace gas with, so we must pay the higher prices, because we are not able to switch to another type of fuel. Supply and Demand If the use of gas powered vehicles increases the demand for the fuel goes up. Usually when this happens it causes cost increases because of the extra production costs involved in supplying the product. The refineries have to work more to increase the quantity supplied, tankers and trucks...
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...Project Paper 1 Business Economics – GM545 Fall Session Exercise #1 – Ethical Issues Ethics is a major topic of concern with regards to financial reporting, decision making and company operations in today’s world of business. There are numerous laws and organizations that have been developed in order to establish punishments for unlawful behavior or the intent to commit fraud. People’s ethical standards are tested daily. The question remains, how does ethics have an impact on the subject or theories of economics? A realistic example would be best in utilizing ethics in conjunction with economic theories to exemplify the affect on supply and demand. A commodity that is continuously worrisome to the public is the price of gasoline. First, let’s describe what the determinants of supply and demand are in order to conclude a price that can satisfy the organizations that supply the product and the demand of consumers that are willing and able to afford the product. The determinants of demand in this case consist of income, number of buyers and expectations of future prices and availability (Stone, 2007). Tastes and preferences along with prices of related goods are not significant to this analysis because each company establishes similar gas prices and there are currently no substitute products (Stone, 2007). The determinants of supply consist of production technology (construction of oil rigs), cost of resources (extracting the oil and producing gasoline), expectations...
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