( Part B2 ) ( 5 points ) Refer to the data in the above scenario . What is the unemployment rate in the United States for the given year ?( Points : 30 )
7 . ( TCOs E and F ) Answer Parts A , B , and C completely . ( 40 points )
( Part A ) Suppose your local Congress representative suggests that the federal government intervenes in the gasoline market to stop runaway price increases . Would you say that this view basically supports the Keynesian or the Monetarist school of thought ? Why ? What position would the opposing school of thought take on this issue ? ( Be brief — you can answer this in two or three brief paragraphs .) ( 15 points )
( Part B ) Any change in the economy ’ s total expenditures would be expected to translate into a change in GDP that was larger than the initial change in spending . This phenomenon is known as the multiplier effect . Explain how the multiplier effect works . ( 10 points )
( Part C ) You are told that 80 cents out of every extra dollar pumped into the economy goes toward consumption ( as opposed to saving ). Estimate the GDP impact of a positive change in government spending that equals $ 200 billion . ( 15 points ) ( Points : 40 )
8 . ( TCO H ) You are in charge of making recommendations based on economic forecasts to uppermanagement of your firm , which produces widgets and employs 2,500 workers . Uppermanagement has informed you that they are planning to build a new facility and hire 500 additional workers . They would like you to research leading indicators and produce a detailed analysis of where the economy is heading in the next 6 months . What would you