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1) Research an Economic Current Event on unemployment; inflation ; or the relationship between unemployment, inflation, and the National Economy - post it in this discussion forum

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1) Research an Economic Current Event on unemployment; inflation ; or the relationship between unemployment, inflation, and the National Economy - post it in this discussion forum.

• If you are thinking about the relationships You might search for Philips curve, or Laffer curve.
• Unemployment and inflation independently are much easier to locate articles make sure you develop some indication of how one is impacted by the other. Typically news articles are written about only one of the three.

The current event must be within the last 90 days. Current events will be at least 3 paragraphs to receive full credit.

2.) When the Federal Reserve Bank “sells” securities it means that the money supply decreases. The opposite then is also true when the Fed purchases securities the money supply increases. Does this seem counter intuitive? Discuss with your classmates and explain how the flow of money works to reduce the money supply as the Fed sells securities.

Research an Economic Current Event on FED policy - post it in this discussion forum.

What actions has the FED taken since the start of this class? What does this tell you about the economy (expanding, shrinking, etc) or the FED's expectation? Should the FED try to influence the business cycle? What other factors might you look at in making this decision?

SELF-CHECK QUESTIONS 1. Suppose the adult population over the age of 16 is 237.8 million and the labor force is 153.9 million (of whom 139.1million are employed). How many people are “not in the labor force?” What are the proportions of employed, unemployed and not in the labor force in the population? Hint: Proportions are percentages. 3. Over the long term, has the U.S. unemployment rate generally trended up, trended down, or remained at basically the same level? 5. Beginning in the 1970s and continuing for three decades, women entered the U.S. labor force in a big way. If we assume that wages are sticky in a downward direction, but that around 1970 the demand for labor equaled the supply of labor at the current wage rate, what do you imagine happened to the wage rate, employment, and unemployment as a result of increased labor force participation? 32. If many workers become discouraged from looking for jobs, explain how the number of jobs could decline but the unemployment rate could fall at the same time. 36. Why do you think that unemployment rates are lower for individuals with more education? 45. A country with a population of eight million adults has five million employed, 500,000 unemployed, and the rest of the adult population is out of the labor force. What’s the unemployment rate? What share of population is in the labor force? Sketch a pie chart that divides the adult population into these three groups. 4. Edna is living in a retirement home where most of her needs are taken care of, but she has some discretionary spending. Based on the basket of goods in Table 9.5, by what percentage does Edna’s cost of living increase between time 1 and time 2? 8. If inflation rises unexpectedly by 5%, would a state government that had recently borrowed money to pay for a new highway benefit or lose? 22. Inflation rates, like most statistics, are imperfect measures. Can you identify some ways that the inflation rate for fruit does not perfectly capture the rising price of fruit? 7. List the areas where government policy can help economic growth. 10. What are the “advantages of backwardness” for economic growth? 22. Over the past 50 years, many countries have experienced an annual growth rate in real GDP per capita greater than that of the United States. Some examples are China, Japan, South Korea, and Taiwan. Does that mean the United States is regressing relative to other countries? Does that mean these countries will eventually overtake the United States in terms of rate of growth of real GDP per capita? Explain. 3. The short run aggregate supply curve was constructed assuming that as the price of outputs increases, the price of inputs stays the same. How would an increase in the prices of important inputs, like energy, affect aggregate supply? 5. Suppose the U.S. Congress passes significant immigration reform that makes it easier for foreigners to come to the United States to work. Use the AD/AS model to explain how this would affect the equilibrium level of GDP and the price level. 12. Suppose, after five years of sluggish growth, the economy of the European Union picks up speed. What would be the likely impact on the U.S. trade balance, GDP, and employment? 41. Why would an economist choose either the neoclassical perspective or the Keynesian perspective, but not both? 46. Hydraulic fracturing (fracking) has the potential to significantly increase the amount of natural gas produced in the United States. If a large percentage of factories and utility companies use natural gas, what will happen to output, the price level, and employment as fracking becomes more widely used?