ECN 321 HW5

PART I: SHORT RESPONSE

1.            Why is a high rate of inflation bad for the economy?

2.            Right now, our economy is going through what phase of the business cycle?  How do you know this?

3.            Explain the difference between deflation and disinflation.

4.            How would you improve upon the way the Bureau of Labor Statistics computes the unemployment rate?

5.            Leo Krause is laid off.  How does he make ends meet until he finds another job?

6.            If we succeeded in setting up a computer-based national job bank with listings of virtually every job opening, what type of unemployment would this nearly eliminate?  Explain how this would happen.

7.            How were you and your family affected by the recession of 2007-2009?

8.            On February 5, 2012, the BLS announced that employment fell by 20,000 in January, while the unemployment rate fell from 10.0 to 9.7.  How do you explain that seeming contradiction?

PART II: RESEARCH PAPER

Directions: Please write a 2-3 page paper in which you address the questions below.  Please format your paper according to APA guidelines (including a title page).  Make sure to cite your references in a reference section. 

Unemployment and inflation are terms most of us have heard before attending this course. Using your own personal experiences (this can include friends and family, as well) with these events describe a recent severe recession, the great depression, or hyperinflation in another country. How have these situations affected you? What changes have you been forced to make? How does history play a role in today’s economy?