Macroeconomics

You are expected to use at least two outside sources for each of the three parts (a total of six). Cite them where they are used in your answer and at the end of the relevant Part.. Do not quote the text or use as a cited source. Do not use Wikipedia or Investopedia as sources..

Part 1:

Using information gleaned from Chapter 7 :

a. Define and discuss the relationship between the Labor Force, Employment and Unemployment.

b. Explain how the unemployment rate is defined and why it is typically overstated if there is a "Discouraged Worker Phenomenon" and/or a decline in the "Labor Force Participation Rate".

c. What is the current Labor Force Participation Rate?

d. Define Full Employment, the Natural Rate of Unemployment and how they differ.

e. Briefly discuss inflation and its impact on the purchasing power of money. List those most likely hurt by the phenomena and those most likely to gain. Why will they be hurt or gain? What is the problem when changes in inflation rates are unanticipated?

f. State the purpose of a price index, the reason for a base year and how an index is defined.

Using information found in Chapter 8:

a. Define Gross Domestic Product (GDP).

b. Outline the two main methods of deriving GDP.

c. Define and briefly explain the difference between Real and Nominal values.

d. Define Real GDP.

Part III:

Using information found in Chapter 9:

a. Define Economic Growth (use the PP Curve to help).

b. Discuss why Growth Rates are important.

c. Discuss the importance of Labor Productivity and the rate of Saving as determinants of economic growth.

d. Define and Discuss New Growth Theory.

e. Define Human Capital and describe its importance to growth and labor productivity.