ECOM1C1

Submit a 4-5 page paper that addresses the following questions. Be sure to use references within the paper that support your answers. Show work for all calculations

1. Suppose that in 2013, the economy produced 10 shirts at $20 each and 5 hamburgers at 5$ each. In 2014, the economy produced 15 shirts at $21 each and 10 hamburgers at $6 each. What is the value of real GDP produced in 2014 using 2013 as the base year? What would be the growth in real GDP?

2. Why is there unemployment ben when the economy is at “full employment”? What are some “costs of unemployment”?

3. Use the table below:

YEAR	CPI
2008	100.0
2009	102.5
2010	106.0
2011	111.0

a. What is the inflation rate of 2010 to 2011?

b. Suppose that you have an income of $30,000 in 2008. How much would you need to be able to have the same standard in living in 2009?

c. What are some of the problems with using the CIP as a measure of standard of living?

4. Explain some limitations of using the GDP as an indicator of standard of living (be sure to do research on your own).