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ECON_1951_J01_202325 Assignment 1 (10%)
Answer the following four questions. Each question is worth 25 marks. Assignment 1 is due at the end of Module 1, and it contributes 10% towards your final course grade.
Please use a Word document to answer the Assignment questions and add hand-drawn or electronically-drawn graphs to the Word document. For example, you can draw a graph, take a photo of it with your phone or other electronic device, and send it to yourself to insert into your assignment file.
Your answers should average about one page per question, excluding graphs, for a total of about four pages, double spaced, plus graphs.
Remember to include the course number, your name, and the Assignment number in your file name (ECON 1951_Jones Emma_Assignment 1).
Question 1
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Explain the expenditure measure of GDP. What is the underlying assumption of this measure? Provide one example where the underlying assumption is violated.
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Explain the income measure of GDP. What is the underlying assumption of this measure? Provide one example where the underlying assumption is violated.
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Explain why we need to compute nominal GDP, real GDP, and per capita GDP.
Question 2
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Explain each of the four types of unemployment.
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Explain how Statistics Canada measures the actual unemployment rate for Canada for a given year.
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Why does every economy have a natural rate of unemployment (NRU)? Can the actual unemployment rate measured by Statistics Canada be greater or lesser than the NRU? If so why?
Question 3
Explain fully why the AD curve has a negative slope. Use graphs to illustrate.
Note
You will need to read ahead to Chapter 6 to help you answer this question.Question 4
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Assume that the economy has a recessionary gap. Explain how the economy will remove this gap without government intervention. Use graphs to illustrate your answer.
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Assume that the economy has an inflationary gap. Explain how the economy will remove this gap without government intervention. Use graphs to illustrate your answer.