What are some of the problems with using the leading indicators to forecast recessions? If you were a policymaker, would you rely on them?
What will be an ideal response?
Although the leading indicators seem to be useful for forecasting the future state of the economy, there are a number of problems in using them. First, the data is usually revised, sometimes substantially, so a signal from the leading indicators may be reversed later. Second, they sometimes give incorrect signals. Third, they don't provide much information on the severity or exact timing of the coming recession. Finally, structural changes in the economy mean the set of indicators must be revised periodically. Policymakers should use the leading indicators as additional information, but should not rely on them alone.
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Suppose real GDP grows at 7 percent per year and the population grows at 2 percent per year. How many years will it take for real GDP and real GDP per person to double?
What will be an ideal response?
Cash welfare is now much less of a national program
Indicate whether the statement is true or false
Management and a labor union are bargaining over how much of a $50 surplus to give to the union. The $50 is divisible up to one cent. The players have one shot to reach an agreement. Management has the ability to announce what it wants first, and then the labor union can accept or reject the offer. Both players get zero if the total amounts asked for exceed $50. If you were the labor union, which type of "rules of play" would you prefer to divide the $50 surplus?
A. One-shot, sequential-move game with management as the first mover B. One-shot, sequential-move game with labor union as the first mover C. One-shot, simultaneous-move game and one-shot, sequential-move game with management as the first mover D. One-shot, simultaneous-move game
In order for a barter transaction to be successful, there must be a
A. federal tax law in effect. B. market for the goods. C. double coincidence of wants. D. high demand for a certain item.