Microeconomics" developed the field of "macroeconomics" as a top lesson from the circular flow model. What is that lesson? Prolonged increased production may affect pollution of the environment. Explain how each of the two main sectors, households and businesses, contribute to pollution.
12. Suppose there are 900,000 persons in the adult population, 750,000 of whom are categorized as discouraged workers. Calculate the unemployment rate (round to one digit to the right of the decimal point). SHOW YOUR WORK.
13. Jobs are being lost because of advances in technology. Which TYPE of unemployment does this policy address?
14. In May of 2000, economists were saying that the US economy was close to full employment even though the unemployment rate was 4.1%. Explain.
15. Using the following data on the Consumer Price Index for a fictitious economy, tell whether there has been inflation, deflation, or neither from each year to the next:
Year CPI Inflation/Deflation/Neither
1978 130
1979 120
1980 100
1981 110
1982 120
16. Given that the base rate of interest a bank would charge with NO inflation = 7% in year A, actual inflation in year A was 3%, but expected inflation that year was predicted to be 2%.
a. What nominal interest rate would the bank have charged for a loan in year A?
b. What real interest rate would the bank actually have earned in year A?
17. Given the following info:
Y C
900 740
1000 820
1100 900
1200 1060
1300 1140
1400
