( 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