GDP figures can be used to make international comparisons of living standards. What are three adjustments made by the International Monetary Fund (IMF) to each country’s GDP to allow for meaningful comparisons of living standards between countries?
Explain.
What will be an ideal response?
First, the IMF converts a country’s GDP into U.S. dollars. Second, the measure of GDP per capita is calculated (GDP in dollars divided by population). Finally, a purchasing power parity adjustment is made to ensure that $1 of GDP per capita purchases the same quantity of goods and services across countries.
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Show in a diagram an S-curve and a 45-degree line. Are all three points of intersection stable equilibrium points? Explain
What will be an ideal response?
Joshua Kohn worked 40 years assembling typewriters at Smith-Corona in Los Angeles, California. When the demand for typewriters fell because people switched to using computers, Josh and 500 others were laid off. He tried to find another job but the particular skills he had acquired at Smith-Corona were no longer useful. The unemployment Josh experienced was
a. cyclical b. structural c. permanent d. frictional e. voluntary
Choose the letter of the diagram in Figure 36.2 that represents the shift in the foreign exchange market for dollars given the following situation, ceteris paribus: The U.S. economy suddenly experiences a recession.
A. a. B. b. C. c. D. d.