Question

1. Which has been increasing faster, GDP or real GDP? Explain your answer.

2. Being unemployed means different things to different people. Illustrate this by making up examples of three different unemployed people.

3. How would you improve upon the way the Bureau of Labor Statistics computes the unemployment rate?

4. The classical economists believed that our economy was always at full employment or tending toward full employment. If our economy were operating below full employment, what would happen, according to the classical, to move the economy back toward full employment?

5. Explain the difference between the long-run aggregate supply curve and the short-run aggregate supply curve.

6. If you had a job as a financial counselor and a bad recession hit, what advice would you give your clients to enable them to keep their heads above water?

7. How would you change the current system of bank overdraft fees to make it more equitable, but still profitable to banks? 8. Should the Federal Reserve Board of Governors remain independent? What is the strongest argument on either side?

Answer 1

ANSWER-1) Nominal GDP refers to a measurement of output in an economy that doesn't adjust for inflation. On contrary, real GDP is adjusted for inflation. Nominal GDP is faster because of the effects of inflated prices of goods and not necessarily a factor of increase in the volumes. Also Nominal GDP is faster because of rise in productivity over time (which will also cause a rise real GDP), apart from the increase in cost due to inflation (which will have no impact on the real GDP). Thus in U.S. nominal GDP has been increasing faster than the real GDP

As per policy we have to answer first question