Category: Economics

The gross domestic product (GDP) of the United States is defined as the all in a given period of time.Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2024.
Scenario
2024 GDP
Included
Excluded
Maple Leaf Gearworks, a U.S. sportswear company, produces a football helmet at a plant in Canada on March 10, 2024. Maple Leaf Gearworks imports the football helmet into the United States on May 20, 2024.
Liberty Wheels, a U.S. automobile company, produces a sedan at a manufacturing facility in Bakersfield on January 21, 2024. It sells the car at a dealership in San Francisco on February 10, 2024.
Du Belgique Air, a Belgian household appliance company, produces a air fryer at a plant in New York on December 5, 2024. A chef-in-training buys the air fryer on December 24.
Using ghost peppers from a garden on your Mississippi property, you make hot sauce in 2024. Similar sauces sell for $6 in a grocery store.
Splinter Crafters, a U.S. forestry company, produces wood ships at a plant in Tennessee on September 13, 2024. It sells the wood chips to Treetop Paperworks for use in the production of paper products that will be made in the United States in 2024. (Note: Focus exclusively on whether production of the wood chips increases GDP directly, and ignore the effect of production of the paper products on GDP.)
The Federal Emergency Management Agency (FEMA) deposits funds into Mike’s checking account to help pay for his hurricane-related expenses.

Question 3.
A seller S owns a single indivisible good. There is one potential buyer B. The seller’s utility if he sells the good and receives a transfer payment tS is equal to tS. If he does not sell the good and receives a transfer tS then his utility is θS + tS, where θS is a random variable with cumulative distribution function FS and density fS. We assume that FS has support θ(S), bar (θ)S and that fS(θS) > 0 for all θS in [θ(S), bar (θ)S].
The buyer’s utility if he purchases the good and pays a transfer tB equals θB − tB, where θB is a random variable with cumulative distribution function FB and density fB. We assume that FB has support θ(B), bar (θ)B and that fB(θB) > 0 for all θB in [θ(B), bar (θ)B]. The buyer’s utility if he does not obtain the good and pays transfer tB is −tB.
The random variables θS and θB are independent. In addition, bar (θ)S > θB and θ(S) b = 0.
The designer seeks a mechanism which is (1) ex-ante budget-balanced, (2) interim individually rational and (3) Bayesian Incentive Compatible. Using the above result, write down the constraints and the implications of these requirements.
Hint:
While solving the exercise, watch out for the payoff function of the seller. In order to use the results obtained for the linear model during the lecture, it is useful to rewrite the seller’s payoff as −x θS − tilde(t)S, with tilde(t)S = −tS. This does not change the mechanism designer’s problem because we included an additively separable constant to the seller’s payoff function. But, doing so, one sees that the

2. Discouraged workers
Which of the following statements correctly describe discouraged workers? (If none of the choices apply, leave all of the checkboxes blank.) Check all that apply.
They have given up on looking for a job.
They are counted as part of the labor force by the Bureau of Labor Statistics.
They are employed workers who want to earn higher wages.
They have not looked for a job in 4 weeks (or longer), but they would like a job and are available for work.
The following table contains U.S. employment information from August 2019.
Category
Value
Civilian Population (Persons 16 years old and over)
259,432,000
Employed (Persons)
157,878,000
Unemployed (Persons)
6,044,000
Discouraged (Persons)
467,000
The Bureau of Labor Statistics has several measures of joblessness in addition to the official unemployment rate. One alternative is the U-4 measure of labor underutilization, which is calculated as follows:
U-4 = 100 × (Unemployed + Discouraged) / (Labor Force + Discouraged)
Fill in the following table by calculating the official unemployment rate and the U-4 measure of labor underutilization.
Measure
Value (Percent)
Official Unemployment Rate (Percent)
U-4 Measure of Labor Underutilization (Percent)
The official unemployment rate and the U-4 measure of labor underutilization are two different measures of joblessness in the economy. If the Bureau of Labor Statistics were to include discouraged workers in the official unemployment rate, the reported unemployment rate would be higher.

The area of intellectual property (IP) has become a critical component of international business in our globalized economy.
As trade and irvestment have expanded between countries, it is imperative that companies that have developed advanced technology can comfortably enter a new country without the threat of their technology or ideas being stolen and sold under a different source.
If the global community is not able to effectively protect this then certain countries with a higher prevalence of IP protection issues will not attract an optimal level of international irrvestment and could slow the ability to grow their economies, as well as limit international companies’ opportunities for new market growth.
The World Trade Organization (WTO) and WIPO (World Intellectual Property Organization) have provided a certain level of partnership among the WTO member countries in this area.
However, a main weakness in terms of effectiveness is that enforcement is the main tenet of IP law, therefore if these measures are not effectively enforced, then IP issues will persist in many parts of the world.
individual countries should apply pressure on each country to which they trade in order to protect the IP of their companies.
The WTO has 164 countries that are members, and WIPO have 189 invited members, thus the number of countries is so large that neither organization could be expected to promote specific IP items uniformly.
bribery is a serious issue in many countries around the world and can lead to IP laws being broken.

2. Activities included (and not included) in the calculation of GDPThe gross domestic product (GDP) of the United States is defined as the all in a given period of time.Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2024.
Scenario2024 GDPIncludedExcluded
The Federal Emergency Management Agency (FEMA) deposits funds into Mike’s checking account to help pay for his hurricane-related expenses.
Golden Sun Motors, a U.S. automobile company, produces a minivan at a plant in China on March 10, 2024. Golden Sun Motors imports the minivan into the United States on May 20, 2024.
Using ghost peppers from a garden on your Mississippi property, you make hot sauce in 2024. Similar sauces sell for $6 in a grocery store.
Liberty Wheels, a U.S. automobile company, produces a sedan at a manufacturing facility in Bakersfield on January 21, 2024. It sells the car at a dealership in Philadelphia on February 10, 2024.
Jack Motors, a Scottish automobile company, produces a connected SUV at a plant in Pennsylvania on December 5, 2024. Jill buys the connected SUV on December 24.
Yeast Crafters, a U.S. yeast company, produces brewer’s yeast at a plant in Wisconsin on September 13, 2024. It sells the brewer’s yeast to Hoptopia Brew Works for use in the production of a new beer that will be made in the United States in 2024. (Note: Focus exclusively on whether production of the brewer’s yeast increases GDP directly, and ignore the effect of production of the new beer on GDP.)

2. The theory of liquidity preference and the downward-sloping aggregate demand curve
Suppose the money market for some hypothetical economy is given by the following graph, which plots the money demand and money supply curves. Assume the central bank in this economy (the Fed) fixes the quantity of money supplied. Suppose the price level increases from 90 to 105. Shift the appropriate curve on the graph to show the impact of an increase in the overall price level on the market for money.
Money DemandMoney Supply020406080100120121086420INTEREST RATE (Percent)MONEY (Billions of dollars)Money Demand Money Supply
Money Demand and Money Supply
Following the price level increase, the quantity of money demanded at the initial interest rate of 6% will be than the quantity of money supplied by the Fed at this interest rate. As a result, individuals will attempt to their money holdings. In order to do so, they will bonds and other interest-bearing assets, and bond issuers will realize that they interest rates until equilibrium is restored in the money market at an interest rate of .
Aggregate Demand040801201602002401801501209060300PRICE LEVELOUTPUT (Billions of dollars)Aggregate Demand
Aggregate Demand Curve
The change in the interest rate found in the previous task will lead to a in residential and business spending, which will cause in the quantity of output demanded in the economy.