Question

The Data of Macroeconomics -End of Chapter Problem According to the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the first quarter of 2018. This contrasts with the fourth quarter of 2017, when real GDP increased by 2.9 percent. According to the Bureau of Labor Statistics (BLS), the consumer price index (CPID increased by 2.1 percent in 2017. This is the same as the rate of price inflation observed in 2016. The BLS also reports that the unemployment rate for April of 2018 fell to 3.9%, which is the lowest rate of unemployment since December of 2000. Use these data about the recent performance of the U.S. economy to classify each of the following statements as true or false. True False Answer Bank b. In carly 2018, real output in the economy rose, while unemployment declined. d. The low unemployment rate of carly 2018 could have resulted from many discouraged workers leaving the labor force. c. Growth of real output slowed between the last quarter of 2017 and the finst quarter of 2018. a. The prices of all domestic products and services rose in 2017.

Need help, please show work. Choose which statements in the bank whether or not they are true or false.

Answer 1

a. The prices of all domestic products and services rose in 2017: False

It is mentioned here that according to BLS, the consumer price index increased by 2.1% in 2017 which is same as the price inflation observed in 2016 which means the price of domestic products and services in the year 2017 remained same as they were in the year 2016.

b. In early 2018, the real output in the economy rose, while unemployment declined: True

It is mentioned here that according to BEA, real gross domestic product increased at an annual rate of 2.3% in the first quarter of 2018 while the BLS reports that unemployment rate for April of 2018 fell to 3.9%, which is the lowest rate of unemployment since December 2000. Therefore, the real output in the economy rose while unemployment declined in early 2018.

c. Growth of real output slowed down between the last quarter of 2017 and the first quarter of 2018: True

In the last quarter of 2017 real GDP increased by 2.9% while in the first quarter of 2018 the real GDP increased at an annual rate of 2.3% which shows the slow down in the growth of real output between the last quarter of 2017 and the first quarter of 2018.

d. The low unemployment rate of early 2018 could have resulted from many discouraged workers leaving the labor force: False

Since the reason for low rate of unemployment is not mentioned in the above data, so we cannot conclude that the low unemployment rate of early 2018 could have resulted from many discouraged workers leaving the labor force.