Submit a 4- to 5-page paper that addresses the following questions. Be sure to use references within the paper to support your answers. Show work for all calculations
- Suppose that in 2013, the economy produced 10 shirts at $20 each and 5 hamburgers at $5 each. In 2014, the economy produced 15 shirts at $21 each and 10 hamburgers at $6 each. What is the value of real GDP produced in 2014 using 2013 as the base year? What would be the growth in real GDP?
- Why is there unemployment even when the economy is at “full employment”? What are some “costs of unemployment”?
- Use the table below:
Year CPI 2008 100.0 2009 102.5 2010 106.0 2011 111.0
- What is the inflation rate from 2010 to 2011?
- Suppose that you have an income of $30,000 in 2008. How much would you need to be able to have the same standard of living in 2009?
- What are some of the problems with using the CPI as a measure of standard of living?
- Explain some limitations of using GDP as an indicator of standard of living (be sure to do some research on your own).