Window Insert Format Font Tools Table 7 Week 2 Assignment.docx 100% SmartArt Rev

Question

Window Insert Format Font Tools Table 7 Week 2 Assignment.docx 100% SmartArt Review Text Box Shape 10 Points Week 2 Assignment Caloulate the GIDP using only those nambers that may be relevant from the following numbers 608 10B 158 108 S108 S6B 588 Taxc Private Sectoe Gross Investment Impcets Exports b) Describe using examples the thrce types of unemploymont we generally oome acooss and which of these are included in the definition of natural unemploymen(Minium 100 woeds) c) Why do we use real indicators like Real GDP and Real Inierest Rate rather than the neminal indicators wbile examining the tremds in the economy (Minimam 50 wonds)

Explanation / Answer

A.

GDP = consumption + investment + government spending + (export - import)
GDP = 60 + 10 + 10+ (8-6)
GDP = 82 B

B.
There are three types of unemployment in the economy that are named as cyclical unemployment, frictional unemployment and structural unemployment. It can be well understood by the different examples. A person named as Bob is laid off from his company due to poor economic conditions. It is the case of cyclical unemployment where recession has caused the company to lay off employees and unemployment took place. In another case, Maria is waiting for a better job opportunity and she has already rejected 2 jobs. Then, it is the case of frictional unemployment where Maria is changing the job and unemployed for some time. The third example is the John, losing his job as his product typewriter is not in demand. It is due to the technological shift in the economy and structural unemployment is created.
Under natural rate of unemployment, frictional and structural unemployment is considered.

C.
Real GDP and real interest rates as adjusted with the price or inflation rate, taking place in the economy. Hence, these real indicators represent the true picture of the economy. But, nominal indicators are inflated in nature and does not show the true economic scenario. Besides, in the long run, real indicators such as real GDP is stable, but nominal indicators such as price, vary. Hence, real indicators are given more weightage.

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