Problem 7
List some things that have become more expensive during your lifetime. Explain how a rise in price level affects nominal GDP and real GDP.
Problem 8
Did President Roosevelt's New Deal focus on generating aggregate demand, or was its main focus on increasing aggregate supply? Explain.
Problem 9
Analyzing Cause and Effect Globalization opens international boundaries to companies, creating markets that stretch around the world. What role might global competition play in the development of innovations?
Problem 9
What is the underground economy? What impact does it have on a nation's GDP?
Problem 9
Are the components that are considered leading economic indicators causes or effects of changes in the business cycle?
Problem 10
In the 1990 s many people speculated that the economy had been transformed by new technologies. Paul A. Volcker, former chairman of the U.S. Federal Reserve Bank, described it this way: "The speed of communication, the speed of information transfer, the cheapness of communication, the ease of moving things around the world are a difference in kind as well as degree." Do you think that business cycles are inevitable? Can they ever be eliminated entirely? Explain your answer.
Problem 11
How would the following affect GDP? a. Government transfer payments increase. b. Student sells used CD to record store. c. Car owner pays auto repair shop \(\$ 500\) to fix his car.
