1. Bureau of Labor Statistics: Employment and Unemployment

Navigation: Use the link at BLS.gov to visit the “Employment” page of the Bureau of Labor Statistics (BLS). Find to Labor Force Statistics in the Current Employment Statistics (CES).

Perform the indicated operations, and answer the following questions.

a. Retrieve data for Civilian Labor Force Level, Employment Level, and Unemployment Level. Can you identify periods of sharp cyclical swings? Do they show up in data for the labor force, employment, or unemployment?

b. Are cyclical factors important?

c. Select a price index. Take a look at the Consumer Price Index (CPI) at the BLS statistics on inflation in the All Items PDF file. Identify periods during which you index accelerated or decelerated (or even fell). Do the indexes ever provide opposing implications about inflation and deflation?

2. Figure 8-5 on Page 181 of your text displays the combined real GDP of Asia as a percentage of the combined real GDP of the entire world. The figure displays this percentage according to two different measures. One measure uses prevailing exchange rates in currency markets to adjust all countries’ real GDP levels to allow for comparisons. The other measure uses purchasing power parity adjustments.

Utilizing market exchange rates indicates that Asian real GDP’s share of global real GDP generally rose steadily between 1980 and the mid-1990s from less than one-fifth to slightly more than one-fourth of global GDP. In contrast, purchasing power parity measures of real GDP indicate that Asia’s measured share of the world economy has grown to more than 35 percent.

Another measure for comparing the relative “economic sizes” of Asia and the world is per capita real GDP. This measure also can be computed using either foreign exchange rates or purchasing power parities to allow for cross-country comparisons.

When per capita real GDP is computed using foreign exchange rates, Asian per capita real GDP is only 11 percent of global per capita real GDP. When the tabulation uses purchasing power parity adjustments, Asian per capita real GDP is 26 percent of global real GDP per capita.

Thus, both measures indicate that although Asia’s economic size has risen in relation to the world as a whole, Asia’s per capita real GDP remains relatively low. Even though Asian real GDP is relatively high, so is Asia’s population, which is why the region’s per capita real GDP remains only a fraction of the global level.

a. Why is there such a difference in Asia’s share of global real GDP, depending on whether the computation uses purchasing power parities or exchange rates?

b. Why is Asia’s “economic size” so much smaller on a per capita basis than on an absolute basis?

For a recent analysis of the growth of Asia’s share of global economic activity, go to Asian Engine.

To learn about a recent claim that China’s economy is already “larger” than the U.S. economy, go to China Ascendant.

3. Bureau of Labor Statistics: Multifactor Productivity Trends

Navigation: Use the link at Multifactor to visit the multifactor productivity home page of the Bureau of Labor Statistics.

Read the summary, and answer the following questions.

a. What does multifactor productivity measure? Based on your reading of this chapter, how does multifactor productivity relate to the determination of economic growth?

b. Click on Multifactor Productivity Trends in Manufacturing. According to these data, which industries have exhibited the greatest productivity growth in recent years?

Examine multifactor productivity data for the private business sector, the private nonfarm business sector, and the manufacturing sector. Identify periods when multifactor productivity growth was particularly fast or slow.  Does it appear to make a big difference which sector one looks at when evaluating periods of greatest and least growth in multifactor productivity?

4. Part A. Consider the following table displaying annual growth rates for nations X, Y, and Z, each of which entered 2013 with real per capita GDP equal to $20,000.

a. Which nation most likely experienced a sizable earthquake in late 2013 that destroyed a significant portion of its stock of capital goods, but was followed by speedy investments in rebuilding the nation’s capital stock? What is this nation’s per capita real GDP at the end of 2016, rounded to the nearest dollar?

b. Which nation most likely adopted policies in 2013 that encouraged a gradual shift in production from capital goods to consumption goods? What is this nation’s per capita real GDP at the end of 2016, rounded to the nearest dollar?

c. Which nation most likely adopted policies in 2013 that encouraged a quick shift in production from consumption goods to capital goods? What is this nation’s per capita real GDP at the end of 2016, rounded to the nearest dollar?

Part B. In 2014, a nation’s population was 10 million. Its nominal GDP was $40 billion, and its price index was 100. In 2015, its population had increased to 12 million, its nominal GDP had risen to $57.6 billion, and its price index had increased to 120. What was this nation’s economic growth rate during the year?