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    MacroEconomics Paper 3 Review

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    villafuertevi
    The document contains a review of macroeconomics topics including: 1) A multiplier question where if investment increases by $200 and equilibrium expenditure increases by $800, the multiplier is 0.4. 2) Examples of who is and isn't considered part of the labor force. 3) Given original numbers of working age and labor force, new numbers are provided assuming immigration increases working age to 65 million and labor force to 44 million.

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    MacroEconomics Paper 3 Review

    Uploaded by

    villafuertevi
    1K views6 pages
    The document contains a review of macroeconomics topics including: 1) A multiplier question where if investment increases by $200 and equilibrium expenditure increases by $800, the multiplier is 0.4. 2) Examples of who is and isn't considered part of the labor force. 3) Given original numbers of working age and labor force, new numbers are provided assuming immigration increases working age to 65 million and labor force to 44 million.

    Original Description:

    IB HL2 Macro Economics

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    The document contains a review of macroeconomics topics including: 1) A multiplier question where if investment increases by $200 and equilibrium expenditure increases by $800, the multiplier is 0.4. 2) Examples of who is and isn't considered part of the labor force. 3) Given original numbers of working age and labor force, new numbers are provided assuming immigration increases working age to 65 million and labor force to 44 million.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    1K views6 pages

    MacroEconomics Paper 3 Review

    Uploaded by

    villafuertevi
    The document contains a review of macroeconomics topics including: 1) A multiplier question where if investment increases by $200 and equilibrium expenditure increases by $800, the multiplier is 0.4. 2) Examples of who is and isn't considered part of the labor force. 3) Given original numbers of working age and labor force, new numbers are provided assuming immigration increases working age to 65 million and labor force to 44 million.

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    © All Rights Reserved
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    At a glance
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    The document discusses concepts related to macroeconomics including GDP, multipliers, unemployment, labor force participation, and inflation.

    A part-time retail sales clerk, a full-time nurse, and a factory worker whose plant closed but is applying for other jobs are examples of people who are part of the labor force.

    A stay-at-home mother, a person who volunteers in a community center, and a discouraged worker who has given up looking for a job are examples of people who are NOT part of the labor force.

    MacroEconomics Paper 3 Review

    GDP


















    Multiplier:






    3. If investment increases by $200 and, in response,
    equilibrium expenditure increases by $800,
    a. the multiplier is 0.25.
    b. the multiplier is 0.4.
    c. the MPC is 0.75.
    d. None of the above


    Unemployment
    Equilibrium
    GDP ($ in
    billions)
    Auto-
    nomous
    Change in
    spending

    MPC
    MPS
    (MPW)

    Multiplier
    Change
    in GDP
    New
    Equilibrium
    GDP
    88 1 .9 0.1
    10
    10 98
    5 .3 0.8 .2 5 1.5 6.5
    800 -26.67 0.66 0.33 3 -80 720
    8300 -80 0.75 0.25 4 -320 7980
    9000 400 0.6 0.4 2.5 1000 10,000





    Examples of people who ARE part of the labor force:
    A part-time retail sales clerk
    A full-time nurse
    A factory worker whose plant closed but is applying for other jobs

    Examples of people who are NOT part of the labor force:
    A stay-at-home mother (not employed nor seeking employment)
    Person who volunteers in a community center (not formally employed nor seeking employment)
    A discouraged worker who has been looking for a job for 6 months but has given up (not seeking
    employment)


    If there are 60 million people of working age, 70% are available for work, while 39 million are
    employed





    Assume that due to immigration, number of people of working age is 65 million, while labor force
    increases to 44 million



    Consumer Price Index/Inflation





    Using 2009 as a base year, find the price index for 2009, 2010, 2011








    Find the Rate of Inflation from 2009-2011


    Good and
    Service
    # of Units
    in Basket
    (Weight
    Price of
    basket in
    2009
    Value of
    Basket in
    2009
    Prices of
    Basket in
    2010
    Value of
    Basket in
    2010
    Prices of
    Basket in
    2011
    Value of
    Basket in
    2011
    Burgers 37 3 111 4 148 5 185
    DVDs 25 15 375 14 350 16 400
    Haircuts 15 18 270 20 300 21 315
    Total
    Value of
    Basket
    756 798 900


    Does Inflation/Deflation/Disinflation Occur in 2010-2011?

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