Week 3 Discussion Feedback
Module 11 Feedback- This discussion question was a bit tricky this week, because you were not given enough information to answer the question. All you knew was that GDP in 2000=$3,301,800,000, and GDP in 2006= $4,057,500,000. There were more soft drinks produced in 2006 (755,700,000 to be exact.) Since you did not have information on soft drink prices in 2000 or 2006, you could only speculate as to whether or not prices increased or decreased over that time period. More information is needed. If you had information on prices in both years, you could calculate Nominal and Real GDP in both years. You could also figure out Growth in Real GDP using the formula provided in the textbook.
Module 12 Feedback- The unemployment rate is the percentage of the total number of people in the labor force who are not employed. It is calculated by taking the number of unemployed workers divided by the labor force multiplied by 100. For the example, the unemployment rate in July 2012 in the state of Florida was (816063/9269459) x 100 = 8.8%. For comparison purposes, the unemployment rate in July 2013 in Florida was 7.3%, and it was 6.2% in July 2014 in Florida. The unemployment rate in the state is finally coming back down.
Module 13 Feedback- People are unemployed for a myriad of different reasons. Keep in mind the labor force participation rate includes individuals in the labor force aged 16 and older. Structural changes can be responsible for job losses and new jobs created. Poor performance at individual companies also leads to job loss for their employees. Jobs can be outsourced oversees, jobs can be eliminated due to new emerging technologies etc. Frictional unemployment is typically highest during the Peak phase of the business cycle when jobs are plentiful. For example, an individual may quit a job for various reasons to find another job. A woman may be looking for a job after recently having a baby. Structural unemployment is caused by structural changes in the labor force. For example, an individual working at Burger King may be laid off if the minimum wage increases to $15 per hour. An individual may be laid off if a new robot replaces his/her job at an automobile factory. Cyclical unemployment occurs because of the Recession phase of the business cycle when many workers are being laid off due to poor performance at companies.
Module 14 Feedback- According to the website,
the 2014 annual rate of inflation was 1.6%, and as of December 2014, the inflation rate was 0.8%, CPI was equal to 234.812. Deflation occurs when the aggregate price levels decreases. Prolonged deflation typically occurs during the Recession phase of the business cycle. Anytime the aggregate price level decreases, that is considered deflation. You can see deflation occur during many months/years in the U.S. by visiting the website mentioned above which looks at historical inflation data.