?

a.      Find the 2017 inflation rate.

b.     Morgan’s nominal 2017 salary is given above. Is she making more or less than she made in 2017, adjusted for inflation? How ?

2.      Identify each case as an example of structural, cyclical, or frictional unemployment

a.      Businesses begin to see significantly reduced sales. Several close down and workers lose their jobs.

b.     A student graduates from college and begins looking for a job.

c.      A factory deploys a new computer system and lays off several employees it no longer needs.

d.     A worker leaves his job to relocate where his spouse works.

e.     Good X is an increasingly obsolete technology. Companies that make good X shut down and workers lose their jobs. These workers are specialized in making good X and can’t find new jobs utilizing those skills.

f.       A parent re-enters the workforce when her children start school.

1. Recall the definition of GDP. Determine whether the following items are included in this year’s GDP, and briefly explain why.
2. The baker purchases flours from the miller for $300 to make bread. (5 points)
3. A man collects social security. (5 points)
4. You are informed that you have won $3,000,000 in the New Jersy state lottery, to be paid
5. to you in total immediately (5 points)
6. Hertz, the car rental company, replaces its cars by buying $100,000,000 worth of the new cars from General motors. It sells its old cars for used-car dealers for $40,000,000. The consortium resells the used cars to the public for a total of $60,000,000.