Ch12-HW

1) These questions are designed to make you more familiar with online data sources and build your economic intuition. You can answer them by doing research at the Bureau of Labor Statistics (BLS) website.

A) What US state has the highest unemployment? Lowest unemployment? Why might unemployment vary across states?

B) What is the unemployment rate in the Utica-Rome metropolitan statistical area?

C) What is the labor force participation rate of men? Women? Why might these values be different? How would you guess they have evolved over time?

D) Why is Employment Situation Table A-12 interesting? (http://www.bls.gov/news.release/empsit.t12.htm)

2) Do economists only care about cyclical unemployment? Read “Steeled for Recovery” in the December 23, 2006 issue of The Economist. What type of unemployment is the city in this article most concerned about?

3) The citizens of a peculiar country consume imported Compact Disks and domestically-produced Burritos. The table below contains data on the price and quantity consumed of these goods for 2001 and 2002:

	2001		2002
	Price	Quantity	Price	Quantity
Burritos	15	1000	20	1200
CDs	5	2000	10	2200

A) Calculate the CPI in 2002 using a 2001 fixed basket of goods. What was the rate of inflation between 2001 and 2002?

B) Calculate the CPI in 2001 using a 2002 fixed basket of goods. What was the rate of inflation between 2001 and 2002?

C) Would the GDP deflator deliver price-level and inflation estimates equal to those in Parts A and B?

4) Is zero (or negative) inflation desirable?

5) The BLS also has good information about inflation. A dollar today can buy a dollar’s worth of goods and services. How much money would it have taken to buy the same bundle of goods and services in the year of your birth?

6) Why do we discuss unemployment and inflation in the same chapter? According to this Economist article, what does the Phillips Curve describe?