Economic Homework

Economic Homework

Economic Homework

1 . a . According to 2005 estimates The Inflation rate (consumer prices of United States is 3 .2 and the unemployment rate is 5 .1

b . According to same estimates , the inflation rate for the African country Egypt is 4 .9 and its unemployment rate is 9 .5 . Inflation rate for South American country Argentina is 9 .6 and the unemployment rate is 11 .6

The inflation rate of Argentina is almost twice the inflation rate of Egypt while its unemployment rate is two percentage points higher . The

br inflation rate of US is 1 .7 percentage point lower than Egypt 's and 8 .4 points than Argentina . The unemployment rate of US approximately half of both Argentina and Egypt

c ) From the comparison of these figures a relationship emerges that higher inflation rate leads to higher unemployment rates

2 . According to latest figures for the year 2006 , The U .S . unemployment rate have come down to 4 .7 in August from 4 .8 in July . The following figure taken from Internet gives a graphical presentation of change in unemployment over past 1 year Source : HYPERLINK "http /www .careerjournal .com http /www .careerjournal .com

3 . a ) The annual inflation rate from Dec . 1916 to Dec . 1917 is 18 .1 The annual inflation rate from Dec . 1929 to Dec . 1930 is - 6 .4 . For 1974 it is 12 .3 and for 1980 it is 12 .5

Between 1920 and 1940 the change in price is 1 .9 points . Between 1990 and 1998 the change in price is 4 .5 points

b ) Inflation has not always been present in US . As clear from the figures , during 1930s was a marked period when inflation went negative It stayed very low for few years before climbing back again

c ) High inflation rate was a definite problem for US economy in the period of 1970s when it caused serious economic problems and lower productivity . Although there is a general agreement that high inflation damages economy , it is difficult to point out a ceiling on the inflation rate because it is a relative factor in globa web of economic and financial conditions

d ) 1990s have been a period of relatively low inflation and during this period the US economy grew and took a robust form

4 . The state of economy is an important determinant of voting behavior of people . Higher economic growth , low levels of inflation and larger incomes prompts people to vote in favor of incumbent government . On the contrary if the economy is in disarray , prices are rising and income shrinks , it influences people to vote against the present government

5 . a ) The day latest release is 9 /28 /06

b ) According to final estimates of Bureau of Economic Analysis , the real GDP has increased at an annual rate of 2 .6 in the second quarter of 2006 (BEA news

c ) The major contributors in the growth of GDP during this period are positive contributions from personal consumption expenditures for services , exports...